Recto asks funders to intensify aid to PHL

APART from recovering from economic scarring of the Covid-19 pandemic, geopolitical tensions and climate change add up to the struggles faced by developing nations that lack assistance from international financial institutions.

Finance Secretary Ralph G. Recto, who serves as this year’s chairman of the Board of Governors at the Intergovernmental Group of Twenty-four (G-24), appealed to the World Bank, the International Monetary Fund and other financial institutions to “intensify” their efforts in assisting developing countries, such as the Philippines, to alleviate the factors threatening their economic growth.

“Alarmingly, one in every four developing countries is now poorer than before the pandemic. Any slowdown in global economic performance will surely hit the developing economies the hardest. This poses a grave threat to the peace, economic security and prosperity of all our people,” Recto said.

The G-24 Ministerial Meeting was held in Washington, DC, on April 16. Formed in 1971, the G-24 helps coordinate the positions of developing countries on international monetary and development finance issues.

In his opening remarks, Recto said securing immediate access to short-term liquidity and affordable long-term financing is the primary concern for emerging markets and developing economies.

“We call on the international financial institutions to develop more innovative and responsive financing solutions that will help us sustain productivity, enhance longterm growth prospects and increase resilience to economic shocks,” the Finance chief said.

Specifically, Recto mentioned the International Development Association, or IDA21, as a “critical lifeline” for developing countries as it provides grants and low-interest loans for low-income nations.

Recto warned that unless improvements to short-term financing conditions are improved, decades of individual and global efforts to eradicate poverty and inequality, counter climate change and invest in growthenhancing infrastructure projects will be halted, if not reversed.

In a statement, the Department of Finance (DOF) said IMF Managing Director Kristalina Georgieva and WBG President Ajay Banga presented the institutions’ respective initiatives to provide wider access to concessional financing and support developing countries.

Furthermore, the G-24 stressed the importance of ensuring the long-term sustainability of Poverty Reduction and Growth Trust (PRGT) finances to strengthen the assistance to low-income countries, the DOF added.

The Group also urged action to redirect Special Drawing Rights (SDR) from members with strong Balance of Payments positions towards strengthening resources for Emerging Markets and Developing Economies (EMDES) as well as Multilateral Development Banks (MDBS).

The DOF noted that G-24 also lobbied for a downward revision of the margin on the IMF rate of charge given the organization’s “solid” financial performance at a time when EMDES face limited fiscal space and a high debt service burden.

“This will reduce member’s burden and create the fiscal space necessary to implement programs and policies that enhance the achievement of development and climate goals,” the G24 Bureau said.

Apart from the Philippines, the G-24 members include Algeria, Argentina, Brazil, China, Colombia, Congo, Côte d ’Ivoire, Ecuador, Egypt, Ethiopia, Gabon, Ghana, Guatemala, Haiti, India, Iran, Kenya, Lebanon, Mexico, Morocco, Nigeria, Pakistan, Peru, South Africa, Sri Lanka, Syria, Trinidad and Tobago and Venezuela.