Press Release: IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of his Visit to the Philippines
July 31, 2007Press Release No. 07/172
Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), made the following statement today in Manila:
"I am delighted to have had this opportunity to visit the Philippines. I am privileged to have been able to meet with President Gloria Macapagal Arroyo, as well as with House Speaker Jose de Venecia, Senate President Manuel Villar, Finance Secretary Margarito Teves, Bangko Sentral Governor Amando Tetangco, and representatives from business, banking, academia and civil society. I also met Haruhiko Kuroda, President of the Asian Development Bank.
"The visit has given me the opportunity to witness first hand the economic revival underway in the Philippine economy. This upturn has been sparked by the substantial reduction in the fiscal deficit over the past three years. With budget pressures easing, the authorities are rightly giving priority to increasing spending on infrastructure, while continuing with their important goal of balancing the budget. However, more work needs to be done if the authorities' fiscal plans are to be realized. The policy makers I have met have a clear awareness of the need for continued efforts to mobilize the necessary resources and to step up tax collection and efficiency in coming years.
"The benefits of higher growth are not always shared equally and the authorities are in addition rightly increasing budget allocations for basic social services. Organizations outside government also play a vital role in protecting those who are economically most vulnerable and I am delighted to have the opportunity while in Manila to see the important work being done by Gawad Kalinga, an organization dedicated to alleviating extreme poverty by improving access to housing, education, and health.
"Credit is due to the Bangko Sentral ng Pilipinas for containing inflation in recent years despite a number of supply shocks. Welcome progress has also been made in strengthening the banking sector and lending to the private sector has picked up after a long period of stagnation. Going forward, I am confident that continuation of the current strategy of putting pressure on banks to strengthen their balance sheets, while facilitating capital market development, will help to further strengthen the financial sector.
"Deepening structural reforms in other areas, such as the power sector, is also necessary to improve the investment climate, thereby supporting the higher growth that will increase employment and make decisive inroads into poverty.
"I come away from my dialogue in Manila with a deeper understanding of the challenges facing political and business leaders, and with the conviction that the future is bright for the Philippines if policymakers can sustain and build on the impressive progress that has been made.
"I have also had the chance to discuss issues related to the ongoing reforms of the IMF, especially governance reforms intended to strengthen the voting shares of dynamic emerging market economies. I greatly benefited from hearing the Philippine authorities' views on these matters."