RP to enter new IMF program

The country will enter into a new monitoring program with the International Monetary Fund (IMF) by January next year after failing to successfully graduate from its present program with the IMF.

The IMF introduced recently a new system wherein countries that end a program with the Fund can enter into a post monitoring phase where the IMF assesses regularly the economic policies and economic developments in the country, IMF mission head Markus Rodlauer said yesterday.

This means, he said, that a daily report of government’s economic policies, plans and programs would have to be submitted on a regular basis to the IMF board.

Economic Planning Secretary Felipe Medalla said the new program will have a set of agreed upon criteria which will be monitored by the IMF. "These are sets of indicators of good economic management such as deficit, monetary targets, economic targets, inflation, balance of payments, and other structural and financial sector reforms," Medalla said.

However, Medalla said the government and the IMF have yet to firm up the economic targets for next year.

Medalla also said the government is proposing the lowering of the budget deficit target for next year to less than the proposed P85 billion. "The deficit (next year) should be lower than the actual deficit that will be incurred this year," he explained.

The IMF, according to Medalla, has also asked if the proposed P725-billion budget for 2001 could be reduced by at least P5 billion to P6 billion.

"After the proposed cuts on internal revenue allotment and interest payments, the IMF wants a substantive cut of P5 billion to P6 billion, which is not possible," he said.

Meanwhile, Rodlauer said the IMF welcomes the progress made recently by the government on important structural reforms and looks forward to the completion of this year’s reform agenda with the passage of key pending laws on electric power sector restructuring and amendments to the BSP and Philippine Deposit Insurance Corp. charters.