IMF admits ‘nagging’ RP on reforms

The International Monetary Fund (IMF) has admitted that it has been "nagging" for economic reforms in the Philippines as earlier criticized by Finance Secretary Jose Isidro Camacho.

"Did he really say ‘nag’? a chuckling IMF resident representative Vikram Haksar asked reporters, referring to Camacho’s public comments about the need for the IMF to reassess its emerging role in the Philippine economy.

Haksar accepted Camacho’s criticisms graciously and admitted that the IMF could do little to solve the country’s problems outside of identifying what needed to be done.

However, Haksar was quick to add that this was by design and intent.

"Pointing out the obvious doesn’t mean it’s wrong," Haksar said. "It’s really the only thing we can do. The rest is really up to the government."

Having said this, Haksar took exception to what Camacho referred to as the propensity of multilateral agencies to throw loans at the problem instead of providing grants to carry out programs that developing countries could not afford.

"It’s a matter of differences in mandate," Haksar said. "The IMF in particular, has a very different mandate than development funding agencies but even then, we have our share of technical assistance projects that receive very little publicity."

Camacho criticized the IMF, World Bank and other multilateral funding agencies for what he called their "propensity for focusing on negative issues" to the point where it had repeatedly impaired the institutions’ capacity to address the need for constructive solutions.

"They behave more like credit rating agencies than developmental agencies," Camacho said. "This is not what we need. We already know what the problems are and pointing them out repeatedly without the willingness to actually support the offered solutions is basically just nagging. It doesn’t help any."

Camacho’s solution, however, is for multilateral funding agencies to give more dole-outs instead of loans that he said only added to the burden of developing countries like the Philippines.

"Instead of grants, we get more loan proposals," Camacho said. "What we need are grants for things like health projects and basic services, not more loans."