RP seeks extension of IMF program by 3 mos

The government has formally asked the International Monetary Fund (IMF) to extend by three months an existing two-year precautionary borrowing arrangement that expires March 31, Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura said yesterday.

In a letter to IMF Acting Managing Director Stanley Fischer, Buenaventura said the extension is needed because of delays in the passage of an Omnibus Electricity Bill which is expected to become law next month.

The pending law allows more foreigners to enter the power sector, particularly in power generation and distribution. The law was initially expected to be passed in the fourth quarter of 1999.

Buenaventura said the country also plans to request another extension of the IMF borrowing arrangement after the three month period. He did not elaborate.

Buenaventura said there will be some minor changes in the macroeconomic targets earlier set with the IMF.

However, he assured, the changes will be minor as the government is still sticking to its medium-term development plan.

An IMF mission is expected to arrive in Manila in early April to review the Philippines' compliance with economic targets set with the IMF.

The current borrowing program made available to the country about $1.4 billion in standby credit. So far, the Philippines has drawn $722 million from that amount.

A scheduled release of around $400 million in the fourth quarter of 1999 was postponed because of the government's failure to meet a budget deficit target of P85.3 billion ($2.1 billion). Overspending and poor revenue collection caused the government's budget deficit last year to swell to P113.6 billion.