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MANILA – The Philippines is lending the International Monetary Fund $1 billion to help stabilize the global economy amid the euro zone’s debt crisis, the Bangko Sentral ng Pilipinas said on Wednesday.
"The Philippines is supporting the global efforts to stabilize the world economy and maintain it on a growth path. This is the reason why the Philippines is extending a $1 billion loan to the IMF. We are a member of the global community of nations and it is also in our interest to ensure economic and financial stability across the globe,” BSP Governor Amando M. Tetangco Jr. said in a statement.
Tetangco said the loan to the IMF is the Philippines’ way of giving back to the world’s so-called lender of last resort after it helped the country address its financial difficulties in the past.
The Philippines had been a net borrower from the IMF for almost 40 years until the country finally settled its loans in 2006.
“Today, our economic fundamentals are sound, our banks are able to meet domestic credit needs, and we are capable of lending $1 billion from our international reserves to the IMF,” Tetangco said.
“This is a loan to the IMF and we 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. Other nations have also committed to help IMF address the current financial crisis,” he added.
The $1 billion the Philippines lent the IMF forms part of the $456 billion crisis fund that the lender secured from its member-nations to help insulate the global economy from any spillover from the euro zone’s financial difficulties.
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