MANILA, Philippines - The Philippines is strongly supporting calls to increase the voting rights of emerging markets in the International Monetary Fund (IMF) due to their major contribution in the strong recovery of the global economy from a major slump.
BSP Governor Amando M. Tetangco Jr. said in an interview with reporters that dynamic countries including the Philippines should have a stronger voice in the IMF due to their contribution to the global economic recovery.
Early this month, the International Monetary and Finance Committee (IMFC) approved a plan of the Group of 20 (G20) to increase the quotas or voting rights by at least five percent for under-represented countries in the IMF.
“It (five percent) is going to be a good start but others say it should be more,” Tetangco stressed. Quotas determine voting shares and access to IMF loans.
Tetangco said there is a need to boost the legitimacy of under-represented countries in the IMF as emerging markets take the lead in recovery.
“There is a need to increase the quota and voice of dynamic economies consistent with their role in the global economy,” the BSP chief added.
For one, Germany has 5.9 percent of the votes at the IMF and China has just 3.7 percent even though China is now a bigger economy.
Voting rights in the IMF are based on countries’ quotas, the amount of foreign exchange reserves that they have deposited in the IMF. On joining the IMF, countries are allocated a ‘quota subscription’ which determines that member’s maximum financial commitment to the IMF, its voting power in the organization’s weighted voting system, and also a country’s drawing rights in a crisis.
Major decisions require an 85 percent supermajority. The United States has always been the only country able to block a supermajority on its own with a quota of 17.09 percent. However, the 27 member states of the European Union have a combined vote of about 32.07 percent.
The other 165 member countries have a voting share of 28.78 percent of which the Philippines represent 0.41 percent.