Thursday, June 28, 2012

House Minority Supports IMF Loan

..MANILA, Philippines --- The Bangko Sentral ng Pilipinas (BSP) found allies in the House opposition bloc who support the decision to lend $1 billion to the International Monetary Fund (IMF) to help European countries gripped by the global financial crisis.

House Minority Leader Danilo Suarez said the opposition lawmakers are "in favor" of the move, which he described as a "standard banking practice."

"We have nothing against the decision to lend money to IMF," he said, citing that the BSP is "required by law to invest the country's reserves only in foreign-denominated assets."

Suarez said after receiving a "satisfactory explanation" from the BSP and having sought Pampanga Rep. Gloria Macapagal Arroyo's opinion, the House minority is registering its support for the loan to the IMF to promote global financial stability.

"It is the central bank, not the Aquino administration that will extend the loan to the IMF. Such loan will not reduce our international reserves, only reallocate them from investments into loans. The BSP would not be able to use those reserves to reduce our national debt, or invest in government projects, even if it wanted to," he said.

Suarez said the former President herself agreed with the decision, saying that "there is nothing illegal with it and it is a standard banking practice."

However, the Partido ng Manggagawa (PM) and the Kilusang Mayo Uno (KMU) are convinced that the loan could harm overseas Filipino workers (OFWs).

"The fact is, the money from the country's foreign exchange reserves, part of which come from OFW remittances, will be used by the IMF in ways that will harm OFWs," said KMU deputy Secretary-General Leadro Gerodias.

"The $1B-which is the blood and sweat of our OFWs -- will harm our own migrant workers in Europe since the IMF's austerity schemes dictate cuts in wages, reduction in social programs and liberalization of labor contractualization," said PM chairman Renato Magtubo.

The groups said by extending the loan to the IMF, OFWs, just like Europeans workers, will earn less, lose public services, and be easier to fire. (With a report from Leslie Ann Aquino)