IMF chief lauds Philippines: Its the only nation in the World upgraded

COCONUT PALACE. International Monetary Fund (IMF) managing director Chri tine Lagarde i !elcomed "y #ice Pre ident $e%omar &inay during her courte y call on him at Coconut Palace in Pa ay City on Friday. At the center' to &inay( right' i Finance )ecretary Ce ar Puri ima. NI*O $E)U) O+&ETA

The Philippines is the only country in the world for which the International Monetary Fund has upgraded its economic growth forecast for 2012, according to visiting IMF managing director Christine agarde! Compared with the once"powerhouse economies of #urope and the $nited %tates, which are now struggling, the Philippines is on the road to maintaining an average growth rate of & percent ne't year, agarde told a press (riefing in Malaca)ang on Friday! *I congratulated the Filipino authorities for their e'cellent economic stewardship during difficult times! In the last decade, the Philippines managed to have an average growth of a(out & percent,* said agarde, who met earlier with Finance %ecretary Cesar Purisima, +udget %ecretary Florencio ,(ad and -eputy .overnor -iwa .uinigundo of the +ang/o %entral ng Pilipinas! *,nd you will (e interested to /now that this year, 2012, at a very difficult time (ecause of the financial crisis in other parts of the world, the Philippines is pro(a(ly the only country in which

we have increased the growth forecast as opposed to other places in the world where we actually decreased our forecast,* said agarde, the first woman to head the IMF and who was recently named (y For(es maga0ine as the 1th most powerful woman in the world! The ,2uino administration has set a growth target of (etween & and 3 percent this year, 3 and 4 percent in 2015, and at least 4 percent in the succeeding years! agarde said she /new that growth in 2012 would (e *way in e'cess of five percent* even as the IMF loo/ed forward to the country6s growth rate for 2015 (eing in the range of & percent as well! agarde is the second important international leader to ma/e optimistic pro7ections a(out the Philippines6 economic future! ast wee/, visiting Canadian Prime Minister %tephen 8arper6s made the (ullish prediction to President ,2uino that the Philippines was *an emerging ,sian tiger!* ,ustralia earlier made a similar o(servation, with the ,ustralian (usiness esta(lishment led (y the ,sia %ociety ,ustralia telling the President during the latter6s state visit there last month that the Philippines was now *the fastest"growing economy in ,sia!* Good policy mix agarde descri(ed as *e'cellent* the manner (y which the Philippine economy is (eing managed, citing the country6s respecta(le growth, (enign inflation and sta(le financial sector in the wa/e of a crisis gripping many industriali0ed countries! *Than/s to these good policies and reforms, the Philippines has (ecome a vi(rant emerging mar/et that is approaching investment"grade status,* she said! agarde said there was a good mi' of fiscal and monetary policies in the Philippines! This is partly the reason why the country has managed to grow (y a decent pace so far this year despite glo(al economic pro(lems, she said! *Fiscal policy* refers to the ways (y which the government, through the finance and (udget departments, collects and spends revenues, and manages its overall finances! *Monetary policy* refers to the manner (y which the central (an/ manages li2uidity within the economy to help ensure inflation9the increase in consumer prices9stay within managea(le levels and financial mar/ets remain sta(le! In the first semester, the Philippine economy grew (y 3!1 percent from a year ago, while inflation averaged 5!2 percent in the first 10 months, well within the 5" to &"percent target for the year! The Philippine growth performance is considered very favora(le, especially in the light of the contraction suffered (y advanced economies, including those in the #uro 0one and :apan!

In addition, the government6s de(t"to".-P ratio9or the proportion of its outstanding de(ts to the country6s gross domestic product9has fallen over the years from a(out 4; percent in the mid"2000s to 7ust a(out &0 percent today! The &0"percent ratio for the Philippines is way managea(le compared with the average of <0 percent for the euro 0one and the over 100 percent for some #uropean countries confronting a de(t crisis! Moreover, the country6s financial sector remains sta(le, with ma7or (an/s in the country continuing to post dou(le"digit growth in profits while the euro 0one suffers from a crisis in its (an/ing sector! %he said emerging ,sian countries li/e the Philippines play a significant role in driving growth of the glo(al economy at this difficult time when industriali0ed countries are confronted with economic pro(lems! Inclusive growth agarde, however, said that despite the favora(le economic growth story, the country has its share of pro(lems! *It is no secret,* she said, that a(out ;2 percent of the Philippine population was living on less than =2 a day! >ne advice she gave was for the government to continue with, if not strengthen, programs aimed at addressing ine2uality! %he said the government is in the right direction in its antipoverty programs, including the conditional cash transfer ?CCT@ program which gives grants monthly su(sidies to selected poorest families! #conomists agree that a /ey pro(lem of the Philippines is to ma/e the (enefits of its growing economy translate into poverty reduction! They said the economic growth of the Philippines is *noninclusive,* as it is en7oyed almost e'clusively (y the rich and the middle class! *Certainly loo/ing ahead, we share the government6s view that growth must (enefit the (roader section of the population! Ae certainly have research that demonstrate that inclusive growth is more sustaina(le, and it is really to the credit of this government to ma/e sure that growth is as inclusive as possi(le and that ine2ualities can (e reduced,* agarde said! From lender to creditor agarde tal/ed at length on the changed relationship (etween the country and the IMF, following the Philippines6 e'it from the fund6s lending program!

*Ae are loo/ing forward to continuing our partnership in a different setting and status, if I may say so, than in the past, given that the Philippines is a net creditor of the IMF, and has actually participated in the (ilateral loans that have (een put in place this year in order to contri(ute to the increased resources of the IMF to deal with the conse2uences of the financial crisis, including for the crisis ?fund@ (ystanders,* she said! *%o the IMF is very, very pleased for the historical partnership that we6ve had, (ut particularly pleased that it has now ta/en the form of the creditor relationship,* she said! The Philippines earlier this year pledged a =1"(illion loan to the IMF as its contri(ution to the agency6s rescue fund for crisis"stric/en countries, mostly in the euro 0one! The Philippines, which en7oys =12 (illion in foreign e'change reserves, has shifted from (eing a (orrower"mem(er to a creditor"mem(er of the IMF after having fully paid all its o(ligations to the multilateral institution in the late 2000s! agarde said the IMF currently has a little over =1 trillion in funds that it can tap to lend to countries in need! %o far the amount is deemed sufficient, although she said the IMF cannot totally rule out the possi(ility to as/ for additional contri(utions from mem(er"countries, li/e the Philippines, in the future! ending partners Purisima, spea/ing ahead of agarde, than/ed her for including the country in her three"nation ,sian swing, which also includes Malaysia and Cam(odia! 8e noted that while the Philippines has changed from (eing a ma7or customer to a small creditor of the IMF, the agency continues to (e a partner in (uilding institutions! 8e said that in the +ureau of Internal Bevenue, for instance, an IMF adviser was helping the agency develop its information systems *to ma/e sure that we (ecome more efficient in collecting ta'es!* Purisima said the Philippines was loo/ing forward to wor/ing with the IMF in (uilding institutions in Mindanao once a peace agreement is signed with Muslim re(els *within the ne't few months!* agarde had (een scheduled to pay a courtesy call on Mr! ,2uino at 10 a!m! in Malaca)ang, (ut had to (e diverted at the last minute to the Coconut Palace where Cice President :e7omar +inay received her instead! Presidential spo/esperson #dwin acierda said Mr! ,2uino had the flu! *The President is not feeling well! %he will (e received (y the Cice President,* said acierda, who did not ela(orate!

,fter meeting +inay, however, agarde still went to Malaca)ang for a scheduled (riefing with the media! The President is said to (e preparing for a trip to Cam(odia for the 21st leaders6 summit of the ,ssociation of %outheast ,sian Dations! 8e is scheduled to leave for Phnom Penh at 4 p!m! %aturday.( http://is.gd/xIFK7d)
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