IMF official won't confirm $10-B Asean crisis fund

An International Monetary Fund (IMF) official refused to confirm the Philippine government's claim that it has commited to set aside a $10-billion regional crisis fund for Southeast Asia.

IMF resident representative to the Philippines Reza Baqir declined to directly answer queries about the supposed $10 billion stanby facility, and, instead, passed the ball to Philippine finance secretary Margarito Teves.

"It is my understanding that Secretary Teves will provide clarification on the matter upon his return from the United States," Baqir said in reply to ABS-CBN News correspondent Ricky Carandang's inquiry via text message.

Prodded further, Baqir, who is still in Washington D.C., repeatedly begged off to categorically deny or confirm the now controversial $10 billion pledge supposedly made by either the World Bank (WB) or IMF.

Teves flew to Washington D.C. with other members of the Philippine's economic team for the annual IMF-World Bank (WB) meeting last week. The Philippines' economic managers also met with officials of the IMF, WB, Asian Development Bank, and other Southeast Asian countries.

However, in the statement of WB Thursday, Jim Adams, WB's East Asia and Pacific regional vice president, said that there was no discussion to commit funds at the regional level, although there were separate talks with individual countries.

The government of Singapore, one of the Asean members, also said it was not aware of a plan to set up a regional crisis fund.

The Philippine representatives reportedly raised the possibility of a crisis fund for the region. This initiative was reportedly passed on to President Gloria Arroyo, who then publicly announced the plans for a regional fund in Manila.

President Arroyo's announcement immediately made international news and was widely interpreted as the entire Asean region's response to the recent coordinated efforts of the governments of US, Europe, Australia, and Japan to unfreeze credit flows and mitigate the financial crisis’ impact to their economies.

After the WB's and Singapore's denials on Thursday, Philippine government officials tried to explain the mess.

Socioeconomic planning secretary Ralph Recto, who also attended the IMF-WB annual meeting, clarified on Thursday that it was the IMF that mentioned a $10 billion standby facility for Southeast Asian countries, not the WB.

In a press briefing, trade secretary Peter Favila said it was finance secretary who passed on the unverified information to President Arroyo.

Teves will reportedly return on Saturday.

IMF ready to help

In Financial Times interview published before the IMF-WB annual meeting, IMF managing director Dominique Strauss-Kahn said that the fund is ready to help emerging economies hurt by the global financial crisis.

"The crisis is now hurting a lot of emerging markets. Some of them may face balance of payments problems," he told the Financial Times, citing how the repatriation of private capital by foreign investors or the reduction of credit lines from foreign banks is hurting emerging economies balance of payments.

Strauss-Kahn added that he was not opposed to Asian countries seeking each other's support against the financial threat, as long as they were "co-ordinated with multilateral institutions".

The IMF chief said the organisation was also looking at ways it could lend money with fewer conditions than those usually applied to its loans.

During the Asian financial crisis that started in 1997, the IMF was active in lending to Asian countries but these loans came with strict and punishing conditions. -- with AFP