Senator Ralph Recto. INQUIRER FILE PHOTO
Even a senator ally of President Benigno Aquino is questioning the wisdom of the government decision to lend $1 billion to the International Monetary Fund (IMF) to help some of the troubled eurozone countries.
Senator Ralph Recto on Tuesday asked whether the Bangko Sentral ng Pilipinas (BSP) could lend the money without approval from Congress, which created the central bank.
“I’m not totally opposing it but how can the government, through the BSP, lend money to the IMF without authority from Congress?” Recto said in a statement.
He said the BSP could not claim “sole proprietary rights over the country’s dollar reserves”—from which the loan to the IMF will be sourced—and “should seek consensus first or secure appropriation cover from Congress.”
In justifying the $1-billion loan, Malacañang said the Philippines had an “obligation to the IMF [which] has assisted us during our times of crisis.”
The country was on the receiving end of loans from the multilateral agency for four decades. It is now considered a “creditor nation” after it fully paid its debt in 2006.
Recto, a member of the President’s Liberal Party, said the public “must also be made to understand why the government is lending to the IMF while it continuously borrows from international lending and multilateral institutions for budgetary support and deficit spending.”
The senator, who chairs the ways and means committee, said the dollar reserves could be loaned instead to the national government which could then use it to “boost consumption” and finance infrastructure projects such as hospitals and school buildings.
“Spending it to boost consumption is the better way to protect us from contagion,” he said.
Presidential Spokesperson Edwin Lacierda on Tuesday lashed out at critics who said the $1 billion would be better spent on the country’s poor.
He said that to say that the government was not addressing the needs of Filipinos was a “total fallacy,” and that people who say this should look at what the Aquino administration has been doing the past two years.
“Our budget for the CCT (conditional cash transfer program) for next year is P45 billion. That’s effectively $1 billion and, on top of that, we’ve got other programs. We’ve got our assistance (for) irrigation, we’ve got our universal health coverage,” Lacierda said.