Camacho to follow up creation of Asian Fund

Finance Secretary Jose Isidro Camacho will have informal discussions with his ASEAN counterparts about the creation of an Asian Monetary Fund (AMF) as a quick-reaction funding agency capable of addressing the peculiarities of the Asian economy.

Camacho just attended the finance ministers meeting of ASEAN members in Myanmar where he said the AFM concept was something the Philippine delegation would continue floating informally among ASEAN finance officials.

"I support the idea of creating an AMF that would be specifically calibrated to make informed decisions and react swiftly in case of a crisis in the region," Camacho said. "There won’t be anything formal but I will discuss this idea informally at the meeting.

The Philippines has been preparing to tap more Asian countries for bilateral funding agreements, eyeing China as a possible major source of official development assistance as the region discusses the creation of the AFM.

Philippine finance officials said the proposed currency swap deals with China and Korea were only the beginning of the effort to forge as many bilateral agreements as possible between Asian nations before embarking on multilateral agreements that would lead to the AFM.

According to Bangko Sentral ng Pilipinas (BSP) Government Rafael Buenaventura, the so-called Chang Mai Initiative of 2000 was already one step in the right direction as ASEAN members together with Japan, China and Korea agreed to cooperate for a comprehensive regional financing facilities intended to prevent future financial crises from getting out of control as in 1997.

Eventually, Buenaventura said the ASEAN+3 would have to formalize the creation of the AMF as the regional counterpart of the IMF, with the primary task of helping economies in Asia cope with global or regional crises.

Aside from Japan, China, Korea and the seven members of the Association of Southeast Asian Nations that includes the Philippines, the AMF could also invite the members of the Asia-Pacific Economic Cooperation, Camacho said earlier.

The AMF would be useful for countries like the Philippines which has the lowest gross international reserves in the region, making it particularly vulnerable to attacks.

The IMF was heavily criticized for its handling of the 1997 Asian financial crisis and officials said the creation of the AMF would enable one institution to provide relevant funding assistance more suitable to the cultural, religious, practical and bureaucratic characteristics of the region.