Euro nations borrow from Philippines’ IMF fund

By Randell Tiongson on April 6th, 2015

eu-flag1Here’s something very interesting to read: 9 EU Nations borrowed nearly over $400M from the Philippine’s IMF fund!

A recent post at the Manila Bulletin, it said that “the central bank reported that nine countries in Europe had withdrawn $439.50 million from its credit facilities with the International Monetary Fund (IMF).”

As a young elementary student in the 70’s and a high school and college student of the 80’s, I remember having to hear a lot about the International Monetary Fund and how the Philippines was so dependent on it for funding. The IMF was always mentioned as one of the main culprits why the Philippines was poor and how it was enabling the Marcos regime to enslave the nation. Wow, how things have changed from those times!

As a creditor member of the International Monetary Fund, drawing of funds from the fund is the Philippine’s participation to global financial stability. Can you imagine the Philippines contributing to provide ‘global financial stability’? There are 2 funds: IMF’s Financial Transaction Plan (FTP) and New Arrangements to Borrow (NAB). EU member nations Portugal, Ireland, and Greece were the biggest recipients from IMF’s FTP while other nations like Greece, Portugal, Tunisia, Cyprus and Ukraine was also accessed. The Philippines earns from said drawdowns by way of interest payments.

The country continues to register very strong Gross International Reserves (GIR’s) at $ 81.336 as of February 2015.

Another big change from before is our nation is not as indebted as it was before! In fact, the Philippines latest Debt to GDP ratio has improved to 37.3% as compared to 39.7% a year ago. The growth in the Philippine economy has made our debt management easier and we are outperforming many other nations. Our debt to GDP ratio is better than our ASEAN counterparts. The US’s debt to GDP ratio stands at 102.47%, Japan at 227.2%, France at 92.2%, Italy at 132.10%, Singapore at 105.5% and Thailand at 45.7%.

Admittedly, there are much more that needs to be done to ensure sustainable economic gains for the Philippines, one of which is the issue of inclusive growth. However, one cannot argue that the economic condition of the Philippines today is in a much better place than where it was decades ago. Let us continue to work hard at improving our nation, and having the faith to see real and sustainable progress in this generation… our gift for the next generation.

 

 

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74 thoughts on “Euro nations borrow from Philippines’ IMF fund”

  • The true measure of a country’s wealth is not its GNP or GDP or even its GDP-debt ratio but rather on the narrowing of gap between the rich and the poor, the growth of social equity and the inclusivity of the poor in their share of the national wealth. A rich country with so many poor people does not equate to progress.

  • Pnoy term will end on 2016, so who’s next?
    i vote for Ted Failon and Noli de Castro, they’ve done a lot in the country when they are in politics…..or maybe the leaders of Bayan muna, Juana change or Akbayan?…..just wandering? peace people….

  • The Philippines’ healthy fiscal position could be attributed to many factors mainly the OFWS remittances, BPO contributions, prudent monetary policy of Bangko Sent rally and Department of Finance. All these factors are already in place even before PNoy came into power. Perhaps his only contribution is the vow to weed the government of corruption. This has added to investors confidence. They are on the lookout where to park their money given the unfavorable economic climate in Europe and other countries. All I’m saying is that credit must be given to all whom it is due and must not be claimed by any single person or organisation. We are on the right track but much work remains to be done. Investment in human capita must not be stymied to enhance our competitiveness. K 12 must be implemented.

  • I think the booming constructions, realty developments everywhere in the country, and the Filipino overseas dollar earnings being sent back home are main contributors to the economy. We look forward now that the gap between the rich and the poor should be lessened, corruption eradicated, jobs for the youths, education and food for everyone!

  • Yes, I agree that Philippines has improved in the business world standing but ,there are so many people left behind, the poor, aged, homeless children, poor access to health care, so let’s all take care of these problems. Then there is the biggest of them all ,corruption all over.

  • I totally agree with Michael’s comment on April 6, 2015, “A rich country with so many poor people does not equate to progress”. Below are some points to contemplate about:
    -The Philippines depends a lot on foreign remittances.
    -I live in Canada but noticed that there are a lot of temporary foreign Filipino workers(some are teachers and doctors from the Philippines). If the Philippines is progressing why did they leave? Why are they working minimum wage jobs in a foreign country?
    -How many of University graduates can build a descent career out of their degree? Very few I assume unless you are well connected.
    -How many rich parents in the Philippines still support married children(provide housing, milk for the baby etc…)?

  • Now that we have somehow achieved the desired GDP or GNP, the next step would be how to spread the wealth to the poorer members of our nation. Collectively or per capita we are better off today, but if you examine closely the numbers, it’s our rich getting richer while our poor keeps getting poorer. I agree with Michael’s observation, we should narrow the gap between the rich and poor.

  • There’s only one clear indication that this standing debt we had from World Bank -IMF is a big LIE!!! It is very clear that this present administration dance to their tune..Pandora box had opened for private used only…

  • I read a lot of insulting here, our president p-noy has a demand from IMF last 2013 being violating the MONETARY SYSTEM OF CENTRAL BANK OF CENTRAL BANKS RULES, he printed MONEY without GOLD BUCK UP, that’s why the PHILIPPINES blacklisted.in the world..THE RATIO FROM FERDINAND MARCOS $1 EQUIVALENT TO 2 PESOS, TODAY 45 PESOS BECAUSE OF VIOLATING THE MONETARY SYSTEMS OF CENTRAL BANKS RULES WORLDWIDE, the reason behind that our GOVERNMENT is no. 1 LAW BREAKER…THE FILIPINO ARE POOR TODAY BECAUSE OF DEMONIC POLITICIAN WE HAVE…

  • You need to double check your facts Provost. Countries do not need to print their currencies with any gold back up, we are not blacklisted by the IMF; the exchange rate during Marcos was not P2:$1.

  • Randell, you need to study the cycle of monetary system, the engraving and printing rules in the monetary system of central bank worldwide, the Philippines have 400,000 metric tons gold back up to backing up the Philippines currency if you do not know this you need to know?,because 196 countries are member of the monetary system, and these countries they do not allowed to print money without any gold back up..this facts has already practice since before the coming of JESUS CHRIST on earth…

  • Do you know that during Marcos time almost all countries used His Gold as back up to print their currencies..It’s a government to government agreement..Since his death all these agreements that he had with the head of states ended as well…As a law that only Head of State Marcos heirs can revived that agreement..This is the reason why Marcos shipped his thousand of tonnes of Gold to different countries for them to able to print their currencies…This is why our Central Bank is left with 400,000 MT only…

  • I am agree Micheal’s comment they should not comparing in Europe country , because poor people in our country no where to go no homes no proper education for poor people and no medical assistance help, Europe they provided everything as far as i know, a year ago i watch documentary program from our country its so fascinating the situation.

  • Ted Failon? Noli De Castro? MAG-ISIP KA NGA! Ted Failon may have had some achievements, pero kulang yon! Noli De Castro? Ano nagawa non? ngawa? -_-

    DUTERTE or SANTIAGO for PRESIDENT!

  • the only thing that keep our economy stable is the millions of pilipino ofw who keep on remitting to the Philippines imagine the sacrifice they give… but sadly the money that should be used to make Philippines a better country are being used by corrupt officials from lowest rank to highest including the president. If only all pilipino can see how well other countries are, they will envy them most likely were the country pilipino ofw work

  • If the economic conditions of the Philippines has improved, well & good. But we cannot consider ourselves successful economically. I see more poor, destitute people sleeping in the streets because of lack of basic necessities: shelter; little shoeless children begging in the streets so they can have a meal even just once in a day, when they should be in school studying. The streets of Makati is full of these children and it is a pathetic sight seeing them so much in want of the basics in life. It is very sad to say that the Philippines is still a VERY POOR COUNTRY. Let’s do something together to change this situation. Am doing my little part. I live simply so I can share more with the poor because our government has not done enough to alleviate the conditions of the majority poor.

  • Minnie Sereneo – The answer to your question is because of the colonial mentality that is still instilled in every Filipino people, and it’s only fitting as we cannot immediately came out of a bad habit that has always been a part of our culture.

    We Filipinos would always see progress in another country not looking at our own. We tend to see that we belong somewhere else because in the first place we cannot be somebody in our own?

    Now in a globalized world I see things differently. I managed to work oversees and worked for multinational companies but I would still prefer the Philippines.

    We are now entering a globalized world and anyone who is still not seeing that and is blind to change will be left out. The Philippines is a very strategic country for a globalized economy to begin with.

    Believe me start investing here, start loving your own and make yourself competitive to the globalized economy, then you will see change…It’s so easy for us to criticize and then at the end of the day not give a concrete solution to a problem..I am a problem solver…that I think makes the two of us different in how we see the world we are living in.

  • We were brainwashed in school that colonial mentality is the problem in the Philippines. And all public school children were exhorted to believe that Filipinos are equal and even superior in intellect compared to other people. We read about Carlos P. Romulo and his exploits as the little brown man in America.

    Filipinos used to laugh at the backwardness of the Indonesians and the Malaysians during the 70’s. Back then, who would think that an Indonesian consortium will build the LRT system in Metro-Manila? And most Asian products in North America are products of either Malaysia or Thailand. What happened to the Philippines and the much vaunted ingenuity of the Filipinos?

    It is still there except it is being trapped by another form of mentality, the servant mentality. Either you are a boss or a servant in the Philippines. But few are real bosses and majority are actually servants. Servants never question their bosses, or do things that is contrary to what their bosses wanted. It is like a mafia organization. Nothing happens in the Philippines unless the bosses allow it.

    The Philippines is a strategic country in a globalized economy but it missed the boat. Tech manufacturing companies were looking for host countries in the eighties and the Philippines was on top of their list. They changed their minds when they saw the rolling blackouts in Manila.

    Nothing can put down Filipinos for very long. After an explosion of babies when the Aquino administration killed Marcos’ family planning program, Filipinos need more money to support their families. The PCGG legally plundering and killing originally thriving “crony companies” that were paying good money to their employees did not help much at all. The Philippines is swamped with experienced and skilled workers with no jobs. So these workers were exported as TFW’s – “the new heroes”. Everybody was happy. The workers because they are earning money than they cannot hope to earn back home. And the Philippine government for the flood of money transfers from the TFW’s. But then again it unintentionally created generations of children with absentee parents. And people wonder why the moral standard of the Philippines is going down the drain? Where young women willingly have affairs and get impregnated by married men? Where because there are very limited well-paying jobs in the Philippines and so many competitors, the parents and/or siblings abroad end up supporting the “love children”.

    Is there a solution to the Philippine problem? There can never be a solution unless the root of the problem is understood. Money (investments) cannot solve everything. It only hides the rottenness that festers underneath.

    I came across a free e-book titled “The Spell of the Hawaiian Islands and the Philippines” by Isabel Anderson originally published in 1916. It is a quaint little book authored by a rich, politically connected American woman. What hits me was her observation that Filipino leaders at the time wanted the foreigners (Americans) out so that they can freely plunder their own people. Another tidbit she mentioned was that one of the first acts passed by the First Philippine Assembly was to give themselves a raise.

    Nothing really changed since that time. As the influence of the American-created institutions and education waned, the tendency for Filipino leaders to plunder their own country and people also increased. But Filipino voters seem to be attracted to politicians who plunder the most. One will have to wonder why a good percentage still voted for Estrada in the last presidential election even though he was a convicted “plunderer”. Outsiders might also wonder why Binay is a front runner to be next President of the Philippines when there are open questions how he amassed his great wealth.

    We all know there is money in the Philippines. A lot of it. But how come there is an all pervading sense of poverty among ordinary Filipinos. Is it because the money is only held by a few?

    There is a saying from the Caribbean, which I think also applies to overseas Filipinos who eventually returns to the Philippines (loosely translated from Creole English) – “I went overseas to feed my stomach, now I come back to feed my ego”. Isn’t it flattering to be addressed “sir” or “ma’am” everywhere you go?

  • I just want all Filipinos to know that before Philippines was the one borrowing from IMF. Are you not happy that at least this time we can lend. It is not easy to narrow the gap between the rich and the poor, it will take time. I am happy that at least I could see a bright light coming. Let us look at the positive side and positive things will follow.

  • Its unfair to mention that only the OFWs are the main contributor of country’s economic gains. We maybe missed out to point out the thousand patriotic local workers who directly pays 30% from their salaries to the government coffers every payday. We maybe missed to point out also the enterpreneurs of our country who shared the burden of higher taxes. To me I believe, the strong workforce and the growing enterpreneurs are the true heroes behind the country’s success.

  • PNoy good economist? noli and ted failon nxt president?? ang tanga nang mga comment. hahahaha

  • Provost,
    Check the history specially with regards to monetary system then you’ll know that since 1971, a country does not need a back up gold/silver to print money that’s why money now is called currency & any currency has something like This note is legal tender of (name of country) or sa atin “Ang pananalaping ito ay bayarin ng Republika ng Pilipinas” its simply means na ginagarantiyahan ng bawat bansa ang pananalapi. This current is called Fiat Monetary system, it replaced the Bretton Woods System which you’re talking about (need a gold or silver back-up). Search to know about it, investopedia explains it better than me 🙂

  • @ pinoypower, well said. I very much agree with you. That’s what I thought. The better economic conditions nowadays cannot be attributed solely to the present administration. Good economic policies were put in place before Pnoy’s regime.

  • @ Randell, I fully agree with @provost marshall on one thing. During the early 60s when I was young, the exchange rate is $1 to P2.00.

  • GDP, GDP Growth, GDP per capita, Poverty incidence, real or perceived poverty, these are just metrics used to describe a country’s economic health. It’s like saying my blood pressure is 120/80 therefore I’m perfectly healthy. But I’m not complaining about our GDP and other indicator numbers. It shows thatas a country, we are doing something right. Our poverty incidence, gap between rich and the poor, GDP per capita numbers are telling us there is a lot more to be done….and yes, you don’t need gold to “back up” printed bank notes

  • Philippines is the richest country in the world. With the maturity of the provisions of the Bilateral Mines Field Breakthrough Successor Agreement after 50 years , the gold back up for banknotes, treasury notes and other managerial papers worldwide is now ready to be redeemed/withdrawn or be activated/re-structured by the sole signatory/owner who is a Filipino. The general owner/beneficiary are the Filipinos.The earned interest for more than 50 years as per the Bilateral Agreement is allocated as follows after bank charges/ fees/taxes: 50% automatically set aside to be added to principal asset for another time deposit as eternal deposit and the other 50% is for humanitarian and economic development of the Philippines (70%) and the remaining for other countries (30%). In fact, as early as year 2006, had the sole signatory to the global account appeared and unlock the debt facility on time, the Filipinos, especially the poor families, should have already received/derived their share by way of humanitarian, livelihood, infrastructure, economic and environmental protection projects which surely would have reduced the gap of the way of life of the rich and the poor. Nobody can touch or make decision about the release of such funds except the sole signatory. Part of this global account were distributed/deposited in trust to almost all banks in the world to be used as back up for their respective currencies. Greece is just one of the countries where the said funds have been deposited in trust. In behalf of the owner of the global fund, this is being monitored and managed by world financial authorities like the WB, IMF, FRB, BIS and others. With its maturity, the face value plus interest of the bonds and other managerial papers created out of it that were lent to other countries are to be settled so that in turn bailee banks will return it to the bailor/owner including incurred interest. However, borrowing countries are hard up in meeting their scheduled payments due to high interest rate which is not actually going back to owner of global asset as he is only entitled to 1% per year interest under the Bilateral Agreement. It is the global corporate controllers ( they do not own the global asset) who are earning a lot by creating more money/managerial papers out of it and selling it to investors as much as 10 times the original back up which in turn is converted/transmitted to the citizen of each country as a debt and levied as taxes from them. Thus, the citizens are the ones carrying the burden of paying their nation’s debt which big profit is being enjoyed by very few individuals. Since , we Filipinos own the enormous global asset being managed and maintained by the WB and IMF, we do not actually worry about our international debt and we can be assured that after the sole signatory had unlock the global facility, the Filipinos and the Philippines will redeem its glory and reputation around the world. Before the year 2015 ends, something better for the Filipinos will begin to happen God permits. Sharing our funds from IMF to EU is just one of the signs of what will God will give to this beloved Philippines. Let us pray, cooperate and unite.

  • For all those PNoy bashers, who want to downplay the achievements of PNoy, it is not easy to move from debtor to CREDITOR status. For those with crab mentality, saying that the gap between rich and poor is still wide, the gap was also wide when we had debtor status but at least we now know that there is a light at the end of the tunnel–there is hope to bridge that gap.

    PNoy probably isn’t the smartest economist, GMA probably had a more intelligent mind, problem is, she chose to use it to enrich herself and her family.
    His greatest achievement may be to get the ball rolling on the fight vs. graft.

    You want to bridge the gap between rich and poor?
    Stop electing crooks into office!
    Say no to political dynasties!
    Stop voting based on name recall alone!
    Denounce Epal politics!
    Demand basic services from your local government!
    It is our right not a gift from the local politician!
    Demand higher wages for teachers, policemen, firefighters, health workers, street sweepers.
    Build more schools!
    Demand that the minimum non-taxable salaries be increased to P30,000/month including 13th month pay.
    Demand that each province have one government run hospital (with at least 500 beds for charity) for every 500,000 population.
    Establish at least one maximum security prison for drug dealers, murderers, rapists and recalcitrant offenders. Have a high profile watch over this prison to ensure that the jailers do their jobs!
    Bring back the death penalty for heinous crimes including plunder!

  • I still prefer a not-bullish economy for the Phils.
    Look at 1st world countries like UK, Germany, Singapore, & Japan where the govt is the one who is richer but the people has to struggle for a very high standard of living. Their own people still migrate to different parts of the world in order to survive and to live more comfortably. EVerything is very expensive from houses, rent, basic commodities like food, petrol and etc. I still love the Philippines’ life’s condition. People still become poor because they chose it. Destiny is not a Matter of Chance, it is a Matter of Choice.

  • I’m not even an economist but I observe it’s a chicken and egg analogy. if you have good economic index, you have confident investors, then you have jobs, then you have food, then you have less poor, then you have what you say narrowing gap between rich and poor. but how you get to improve your index? I guess it’s a lot of work and mind in there. every sector doing their part is a great help. the govt who guides them is also as important.

  • This is white propaganda. An article of wealth not seen with its peoples lifestyle is empty. Yaman sa salita oo, sa katotohanan hndi, eto lang ngawa ng Aquino administration, mayaman daw tayo. ang tanong ramdam ba ng taong bayan to? Or mga binayaran tong journalist na to ipromote ang administration. Tsk,tsk,teacher po aq,libro nga ng K-12 na yan alam niyo ang ratio ng book sa bata sa school namin, I am teaching G4 0:55. Asan ang yaman na yan, ibigay sa mga Pilipino muna bago sa ibang bansa or else this report is all lies.

  • Rex Cruz , that is totally and well said! one thing the Filipino has in mind and is supposed to be deleted is the Crab Mentality! Greed!

  • I believe that the OFWs and their remittances helped a lot in stabilizing our economy. I remember in the early 1980’s when I worked as a Resources Management Specialist of the defunct Central Visayas Regional Projects, the government need to have these projects to obtain loans from the IMF/ADB to pump prime our economy and save the value of our peso. Today, because of our OFWs even how worst is the imbalance of our export and imports we are assured we will not experience devaluation.

  • These are the fruits of Gloria’s good economic fundamentals that she has instituted during her term. It is just so sad she was not given the credit to these economic improvements. These economic laws were passed and implemented during her term which gained her notoriety because of the greedy burgis in our country who were affected by these laws when they lost their business advantage which they enjoyed since the spanish period. Kudos to GMA

  • Laziness makes a person poorer. I’ve seen ordinary people, some handicap but manage to improve themselves and don’t rely on others.

    Our government provide free education and training and yet the poor ignore or take it for granted. I’m a living witness to “taong grasa” and former beggar that took the opportunity and changes their life for the better.

    There are so many NGO’s helping the poor and yet very few taker and serious enough to make use of the blessing.

    I’m sorry to say that poor get poorer because of laziness.

    My father highest educational attainment is grade 3 but learn the rope the hard way with no regret, retired at San Miguel Corp. with distinction because of hard work and perseverance.

  • michael says:
    April 6, 2015 at 10:57 pm
    “The true measure of a country’s wealth is not its GNP or GDP or even its GDP-debt ratio but rather on the narrowing of gap between the rich and the poor, the growth of social equity and the inclusivity of the poor in their share of the national wealth. A rich country with so many poor people does not equate to progress.”

    Actually, no. I would explain, but this socialistic, moralistic, unrealistic rant is not worth it. The true measure of a country’s wealth is its GDP. Period.

  • Overseas Filipino workers has contributed million of dollars to improve our economic standard and stability.This is good to hear that we are lending money to IMF members but our government should also make plans how to stabilize the Filipino people living condition. Create more local jobs and eradicating the too high standard in job application. The poor and wealthy must have equal access to basic needs like hospitalization and other government benefits. Through this we can see that the taxes are properly handled and distributed. Eliminate the corrupt leaders by voting wisely. Only then we can boast that we are lending funds to Euro nations.

  • For me,Our main problem why we are now way behind with other countries esp in SE asia is that NOBODY in our government seriously tacles the problem of the fast growing population.Over population is the main problem we have…Here it starts poverty,lack of proper education and criminal activity which is now rampant throughout the country.I am an OFW for almost 20 yrs. having been to most parts of mid-east and now europe.Countries with less population (LESS KIDS)have more decent way of living coz family can educate and support well their kids and grow responsibly.Walang mga squatter,holdapan,rape, murder etc….Grabe na ang nangyayari sa ating bansa…mas nakakatakot pa nga minsan pag nagbakasyon sa ating bansa.Sabi ng marami…mahirap ang buhay…tanungin mo kung ilang anak…5,6,7 or more at ang trabaho..trycicle driver etc…Wake up concerned Politicians…over populated na po tayo….reminder lang po….

  • Sure we expect the philippine govt to address the needs of the less privileged…but i also expect these people to contribute & do something themselves. I’m not from a rich family but i believe the hard work & discipline do pay off. We cannot put everything on the shoulders of the government. We have to do our share & contribute too.

  • I think the real heroes are the politicians and bureaucrats. Productive citizens cannot live without them. We need more regulations and more taxes for they know better how to run our lives and besides they need fund to support their projects for our good. They are selfless. They sacrifice themselves in the name of public service. Their only concern is the for nation’s good. And that’s the reason our economy now is growing. We owe it all to them. Let’s pay them respect that they deserve.

  • I agree that the OFW’s remittances help the economy of
    the Philippines, but also the family back home, the wife
    especially also help the economy by saving, investing and
    buying local goods. The professionals and workers also
    helped by paying taxes and building infrastructures so
    the goods that farmers produces can easily be marketed. A developed country has a healthy population, nice
    housing and no homeless population.

  • IMF is not a basis why we need to celebrate this nonsense issue, Philippines is still need of Long Term Solution specially for the poor people, why you praise Pnoy even him don’t understand this? Open your minds my countrymen. ^_^

  • Very well said Dante Valencia: yes indeed Dovest Dove is alive and is ready to come out anytime..2016 will be a great year not only for Filipinos but for the whole human kind through Pope Francis 2016 Paris Treaty:”The hereditary Owners of each Land & Lands will have to be the Signatories of the intl. binding Paris Treaty 2016 on the Environment, which also identifies them as the rightful Owners of the physical assets = AU & other physical Assets.It cannot be Corporations !”

  • I like the posting of Fritz.Our country has a lot of problems which cannot be resolved overnigh. It needs not only our leaders commitment but also its people to make it successful . So guys let us work together. Uncovering ,discussing, and suggesting solutions are not enough. We have to do it ourselves, each one of us whether you are a leader or follower. Let us not be merely observer. I believe we can do it.

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Euro nations borrow from Philippines’ IMF fund