RP to draw from IMF facility in June

The government will draw from $200 million to $300 million from the International Monetary Fund (IMF) by next month to boost its gross international reserves (GIR), Finance Secretary Jose T. Pardo said yesterday.

"We will ask for a drawdown," Pardo said.

The Philippine negotiating team is scheduled to meet with an IMF team on June 19. If the government passes all the quantitative performance criteria on base money, net international reserves, public sector financing requirement, and ceilings on foreign borrowings, then it is entitled to draw another tranche from the IMF's $1.4-billion standby facility.

Out of the $1.4-billion loan, the government has availed of only $755 million which was mainly used to help beef up the country's GIR which now stands at $15.8 billion.

The Bangko Sentral ng Pilipinas (BSP) sometimes uses part of the GIR to provide dollars in the currency market, especially if there are wild gyrations in the foreign exchange rate.

Aside from the performance criteria, Pardo said the government must satisfy the structural reforms provided under the IMF program to get the much-sought after "seal of good housekeeping."

Among the reform measures the government must put in place to satisfy the IMF are the full privatization of the Philippine National Bank (PNB) and the passage of a bill reforming the power sector and the privatization of the National Power Corp.

The government is set to auction off its remaining 30 percent stake in PNB on June 9 along with the 46 percent share of Lucio Tan and the 3.5 percent equity of the PNB Retirement Fund.