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THE next
five years are to prove more challenging for the Bangko
Sentral ng Pilipinas (BSP).
But BSP
Governor Amando Tetangco Jr. is confident the monetary
authorities are up to the task and that the economy is
in a better position to deal with whatever is coming.
“The
next five years are likely to be more challenging as the
global environment evolves. But as I have said in the
past, our economy is now better able, through the
reforms we have put in place, to weather this,” he said
in an e-mail.
He also
took time to reflect on events in the past few years
when the Philippines was able to free itself from
supervision and control of the International Monetary
Fund (IMF).
“Having
fully prepaid all our outstanding debt to the IMF
signals to the global economy that we are well able to
craft our own monetary policies,” Tetangco said as the
BSP marked on Thursday the 15th year of its
transformation from pressure-prone Central Bank of the
Philippines to a fully independent BSP.
He added
the IMF-free years “signal to the market that we have
come to a level of strength in our external position
that allows us to be less vulnerable to external
volatilities.”
Tetangco
was deputy BSP governor in 2004 when Manila’s final loan
program with the IMF expired and the postprogram
monitoring scheme kicked in.
But he
presided over the BSP when the last amortization to
then-outstanding loans with the IMF was paid in full in
December 2006.
Since
then, the BSP has amassed foreign-exchange resources
that allowed gross international reserves (GIR) to climb
from less than $18 billion, when Tetangco assumed the
top post in July 2006, to double that amount or $36.6
billion at end-May this year. The GIR is a measure of
capacity to pay for vital overseas goods not locally
available, as well as a measure of capacity to pay down
foreign obligations.
The
current GIR is sufficient to cover 6.2 months worth of
imports versus only 3.8 months when Tetangco first took
over as BSP chief.
As cover
for short-term foreign debt based on original maturity,
the ratio has gone up substantially from 2.9 months in
2005 to 5.2 months at present.
Tetangco
earlier reported that the country’s foreign debts as
percent of local output or the gross domestic product
(GDP) was reduced to 35.5 percent of GDP, or only $54.6
billion as of end-March this year. In March 2007 the
external debt ratio was 44.2 percent. |
