The IMF, however, appears less concerned about the short-term implications of market jitters than the medium-term impact of the May elections.
The IMF met with government officials late Tuesday to discuss recent developments, particularly the expected impact of the May elections, on pending revenue measures.
The top level meeting was attended by Finance Secretary Juanita Amatong, Budget Secretary Emilia Boncodin, Bangko Sentral ng Pilipinas Governor Rafael Buenaventura and the IMF team led by resident representative Vikram Haksar.
According to Buenaventura, the IMF was particularly concerned about the revenue measures that were left pending before both houses of congress adjourned. They also expressed concern over the impact of Congress’ failure to enact the 2004 national budget.
Buenaventura said the concern is understandable since the passage of these measures is critical to the government’s target to balance the national budget by 2009.
"The bottom line was still the fiscal program," Buenaventura said. "Naturally, we could not give assurances about the legislative measures that are still pending. That will be up to the 14th Congress."
Buenaventura all but ruled out any possibility that any of the measures that have not been passed and signed into law still stands any chance of making it through before May.
He said any revenue measure between now and the reopening of Congress after the elections will have to be administrative , not legislative in nature.
On the other hand, Buenaventura said the IMF expressed satisfaction that despite the fluctuations in the foreign exchange rate, the has resisted the urge to set a fixed peso-dollar exchange rate.
"They’re pleased that we aren’t trying to do it and that we’re keeping to the limitations of our mandate to provide liquidity to the market when it needs it,‰ Buenaventura said.
On the whole, Buenaventura said Amatong and Boncodin were both able to explain that the fiscal management program is still in effect and despite the failure of Congress to pass the 2004 budget, there would be no deviation from the scheduled reduction in the budget deficit.