Minority leader Danilo Suarez tells the media that they are in favor of the BSP's $1 billion loan to the IMF.
MANILA, Philippines—Former president and now Pampanga Representative Gloria Macapagal-Arroyo supports the $1 billion pledge made by the Bangko Sentral ng Pilipinas to the International Monetary Fund, her supporter House Minority Leader Danilo Suarez said Wednesday.
Suarez said that after consulting with Arroyo, who is a former economics professor, the minority bloc in the House was satisfied with the explanation of the BSP on the $1-billion contribution.
The said amount was loaned from the country’s international reserves by the BSP to help the IMF assist countries affected by the eurozone debt crisis.
He told reporters that according to Arroyo the BSP is not a constitutional body and that under the law it has independence to loan the said amount to the IMF.
“No congressman or senator can say they know it all so I asked for her (Arroyo’s) position, not whether she supports it or not, and she said there was nothing illegal in (the pledge),” said Suarez.
“We have nothing against placing that money in IMF WB (World Bank). We are in favor (of the loan),” he said.
“Such a loan will not reduce our international reserves, only reallocate them from investments to loans. The BSP is required by law to invest the country’s reserves only in foreign-denominated assets,” Suarez explained, adding that the reserves cannot be used to reduce the country’s debt or to invest in government projects.
The country, under the Arroyo administration in 2006, had paid off all of its loans with the IMF and had religiously paid the money it owed earning for itself the tag of A1 borrower, Suarez said.
The Philippines acquired the status of a lender when it paid back all of its loans.
He said that the Aquino administration, which admitted to having “inherited a strong economy in 2010,” should not take credit for the decision to pledge $1 billion to the IMF since it was “simply a technical portfolio rebalancing decision by the BSP.”