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Manila, Philippines -- The Philippines will again assist economically struggling nations by contributing a $1-billion loan to the International Monetary Fund (IMF).
The money will come from the Bangko Sentral ng Pilipinas (BSP)' international dollar reserves that increased due to the high remittance from overseas Filipino Workers, according to Department of Finance Undersecretary for International Financing Rosalia De Leon.
In 2011, the Philippines also lent over $125 million to ailing economies in Europe through the IMF.
For almost 45 years, the Philippines was a chronic IMF borrower. But it was able to transform itself as a lender after the country prepaid all of the government's outstandings debts with the IMF.
Starting in 2010, when the country's foreign reserves started to expand, the Philippines joined other nations that lent to borrowing IMF member-countries.
“We have been a recipient of IMF assistance for the past 40 years. Now that we have been considered a creditor nation, we feel it’s our obligation to assist those nations who require funding from the IMF,” presidential spokesman Edwin Lacierda said in a press briefing in Malacanang on Thursday.
"This will also help in stabilizing the crisis that is going on in Europe,” he added.
Reporters asked Lacierda how the government can guarantee the people that the $1 billion loan to the IMF wouldn’t be mismanaged.
“As to whether it is risky or not, we believe that the IMF will act judiciously on the funds. There is now a standby fund for around $456 billion, and we have contributed $1 billion to that fund,” Lacierda said.
According to the BSP, the Philippines "will get our money back with interest."
"In effect, by extending a loan to the IMF that will earn money for the Philippines we are also able to help other nations saddled with financial problems,” the bank said. - with reports from Romsanne R. Ortiguero