BSP renews $1-B IMF borrowing agreement

The Bangko Sentral ng Pilipinas’ (BSP) $1-billion renewed commitment to the International Monetary Fund’s (IMF) bilateral borrowing agreements along with 40 other members were approved for maximum terms of until 2020, a statement from the IMF said.

The BSP represents the Philippines but the independent institution is a member of the IMF in its own right. The IMF’s bilateral borrowing is its third line of defense after quotas and the New Arrangements to Borrow (NAB) which BSP is a participant.

In the statement, IMF managing director Christine Lagarde said she is “heartened by the prompt response received from many countries that joined this important international cooperative effort to maintain the IMF’s access to bilateral resources under the 2016 Framework for bilateral borrowing.”

Lagarde said that with the effective extension of access to bilateral borrowed resources until end-2019/20, the “membership has helped preserve the IMF’s overall lending capacity of about $1 trillion, providing confidence that the IMF will continue to address the needs of our membership.”

The IMF’s completion of the bilateral borrowed resources extention comprised of commitments under the 2016 borrowing framework amounting to $450 billion from 40 members. This was five more participants from the original 35 members under the 2012 borrowing framework to which the Philippines was also included.

The IMF said these commitments have been approved by the IMF’s Executive Board, and 39 of 40 agreements are now into effect. The 2016 version is apparently more flexible in certain provisions and considers the creditors’ preferences.

Among ASEAN members, the Philippines’ $1 billion commitment is higher than Brunei Darussalam’s $300 million and at par with Malaysia which is also committed for $1 billion. Thailand and Singapore are contributing $4 billion each to the IMF bilateral borrowed resources.