RP to ask for extension of IMF standby program

The country's existing standby program with the International Monetary Fund (IMF) will likely continue until the end of the year to allow all the program's funds to be disbursed, according to IMF Resident Representative Sean Nolan.

Nolan said the reason for the possible extension of the program until December this year is to give time for the completion of the remaining disbursement of funds attached to the program.

"Because of the delay in the March review and the request for the extension of the program first to June then to September, it also follows that the performance targets would be moved," Nolan said.

Nolan also confirmed that an IMF mission will visit Manila from March 31 to April 12 to discuss economic and financial policies with government authorities as part of the process for completing the fifth review under the current standby arrangement program.

Completion of the review, Nolan said, would pave the way for consideration of the economic program by the IMF's Executive Board and release of another tranche of the standby arrangement.

The current Standby Arrangement program with the IMF was approved on April 1, 1998 and was originally set to cover the two-year period up to March 31, 2000.

Financial support to the country under the program amounted to $1.38 billion of which $740 million has already been disbursed.

Discussions in the next two weeks are expected to cover key macroeconomic and structural reforms such as the following:

* the fiscal policy framework for this year including measures being undertaken to strengthen tax administration, to broaden the revenue base, and to ensure solid financial performance in the government-owned or controlled corporations and financial institutions;

* the BSP's monetary program for the remainder of the year; and

* the status of the banking sector reform including measures to strengthen banking supervision and the government's plan to complete the privatization of the Philippine National Bank (PNB).

The IMF has been pressing the country to reform the banking sector, securities law and capital markets, rationalize the power industry and privatized PNB. -