IMF chief lauds PH: It’s the only nation upgraded


COCONUT PALACE. International Monetary Fund (IMF) managing director Christine Lagarde is welcomed by Vice President Jejomar Binay during her courtesy call on him at Coconut Palace in Pasay City on Friday. At the center, to Binay’s right, is Finance Secretary Cesar Purisima. NIÑO JESUS ORBETA

MANILA, Philippines—The Philippines is the only country in the world for which the International Monetary Fund has upgraded its economic growth forecast for 2012, according to visiting IMF managing director Christine Lagarde.

Compared with the once-powerhouse economies of Europe and the United States, which are now struggling, the Philippines is on the road to maintaining an average growth rate of 5 percent next year, Lagarde told a press briefing in Malacañang on Friday.

“I congratulated the Filipino authorities for their excellent economic stewardship during difficult times. In the last decade, the Philippines managed to have an average growth of about 5 percent,” said Lagarde, who met earlier with Finance Secretary Cesar Purisima, Budget Secretary Florencio Abad and Deputy Governor Diwa Guinigundo of the Bangko Sentral ng Pilipinas.

“And you will be interested to know that this year, 2012, at a very difficult time because of the financial crisis in other parts of the world, the Philippines is probably the only country in which we have increased the growth forecast as opposed to other places in the world where we actually decreased our forecast,” said Lagarde, the first woman to head the IMF and who was recently named by Forbes magazine as the 8th most powerful woman in the world.

The Aquino administration has set a growth target of between 5 and 6 percent this year, 6 and 7 percent in 2013, and at least 7 percent in the succeeding years.

Lagarde said she knew that growth in 2012 would be “way in excess of five percent” even as the IMF looked forward to the country’s growth rate for 2013 being in the range of 5 percent as well.

Lagarde is the second important international leader to make optimistic projections about the Philippines’ economic future. Last week, visiting Canadian Prime Minister Stephen Harper’s made the bullish prediction to President Aquino that the Philippines was “an emerging Asian tiger.”

Australia earlier made a similar observation, with the Australian business establishment led by the Asia Society Australia telling the President during the latter’s state visit there last month that the Philippines was now “the fastest-growing economy in Asia.”


Good policy mix

Lagarde described as “excellent” the manner by which the Philippine economy is being managed, citing the country’s respectable growth, benign inflation and stable financial sector in the wake of a crisis gripping many industrialized countries.

“Thanks to these good policies and reforms, the Philippines has become a vibrant emerging market that is approaching investment-grade status,” she said.

Lagarde said there was a good mix of fiscal and monetary policies in the Philippines.

This is partly the reason why the country has managed to grow by a decent pace so far this year despite global economic problems, she said.

“Fiscal policy” refers to the ways by which the government, through the finance and budget departments, collects and spends revenues, and manages its overall finances. “Monetary policy” refers to the manner by which the central bank manages liquidity within the economy to help ensure inflation—the increase in consumer prices—stay within manageable levels and financial markets remain stable.

In the first semester, the Philippine economy grew by 6.1 percent from a year ago, while inflation averaged 3.2 percent in the first 10 months, well within the 3- to 5-percent target for the year.

The Philippine growth performance is considered very favorable, especially in the light of the contraction suffered by advanced economies, including those in the Euro zone and Japan.

In addition, the government’s debt-to-GDP ratio—or the proportion of its outstanding debts to the country’s gross domestic product—has fallen over the years from about 74 percent in the mid-2000s to just about 50 percent today.

The 50-percent ratio for the Philippines is way manageable compared with the average of 90 percent for the euro zone and the over 100 percent for some European countries confronting a debt crisis.

Moreover, the country’s financial sector remains stable, with major banks in the country continuing to post double-digit growth in profits while the euro zone suffers from a crisis in its banking sector.

She said emerging Asian countries like the Philippines play a significant role in driving growth of the global economy at this difficult time when industrialized countries are confronted with economic problems.

Inclusive growth

Lagarde, however, said that despite the favorable economic growth story, the country has its share of problems.

“It is no secret,” she said, that about 42 percent of the Philippine population was living on less than $2 a day.

One advice she gave was for the government to continue with, if not strengthen, programs aimed at addressing inequality.

She said the government is in the right direction in its antipoverty programs, including the conditional cash transfer (CCT) program which gives grants monthly subsidies to selected poorest families.

Economists agree that a key problem of the Philippines is to make the benefits of its growing economy translate into poverty reduction. They said the economic growth of the Philippines is “noninclusive,” as it is enjoyed almost exclusively by the rich and the middle class.

“Certainly looking ahead, we share the government’s view that growth must benefit the broader section of the population. We certainly have research that demonstrate that inclusive growth is more sustainable, and it is really to the credit of this government to make sure that growth is as inclusive as possible and that inequalities can be reduced,” Lagarde said.


From lender to creditor

Lagarde talked at length on the changed relationship between the country and the IMF, following the Philippines’ exit from the fund’s lending program.

“We are looking forward to continuing our partnership in a different setting and status, if I may say so, than in the past, given that the Philippines is a net creditor of the IMF, and has actually participated in the bilateral loans that have been put in place this year in order to contribute to the increased resources of the IMF to deal with the consequences of the financial crisis, including for the crisis (fund) bystanders,” she said.

“So the IMF is very, very pleased for the historical partnership that we’ve had, but particularly pleased that it has now taken the form of the creditor relationship,” she said.

The Philippines earlier this year pledged a $1-billion loan to the IMF as its contribution to the agency’s rescue fund for crisis-stricken countries, mostly in the euro zone.

The Philippines, which enjoys $82 billion in foreign exchange reserves, has shifted from being a borrower-member to a creditor-member of the IMF after having fully paid all its obligations to the multilateral institution in the late 2000s.

Lagarde said the IMF currently has a little over $1 trillion in funds that it can tap to lend to countries in need. So far the amount is deemed sufficient, although she said the IMF cannot totally rule out the possibility to ask for additional contributions from member-countries, like the Philippines, in the future.

Lending partners

Purisima, speaking ahead of Lagarde, thanked her for including the country in her three-nation Asian swing, which also includes Malaysia and Cambodia.

He noted that while the Philippines has changed from being a major customer to a small creditor of the IMF, the agency continues to be a partner in building institutions.

He said that in the Bureau of Internal Revenue, for instance, an IMF adviser was helping the agency develop its information systems “to make sure that we become more efficient in collecting taxes.”

Purisima said the Philippines was looking forward to working with the IMF in building institutions in Mindanao once a peace agreement is signed with Muslim rebels “within the next few months.”

Lagarde had been scheduled to pay a courtesy call on Mr. Aquino at 10 a.m. in Malacañang, but had to be diverted at the last minute to the Coconut Palace where Vice President Jejomar Binay received her instead.

Presidential spokesperson Edwin Lacierda said Mr. Aquino had the flu.

“The President is not feeling well. She will be received by the Vice President,” said Lacierda, who did not elaborate.

After meeting Binay, however, Lagarde still went to Malacañang for a scheduled briefing with the media.

The President is said to be preparing for a trip to Cambodia for the 21st leaders’ summit of the Association of Southeast Asian Nations. He is scheduled to leave for Phnom Penh at 7 p.m. Saturday.

Get Inquirer updates while on the go, add us on these apps:

Inquirer Viber

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • Fred Mil

    “. In the last decade, the Philippines managed to have an average growth of about 5 percent”

    — the difference is that the past the gains are stolen by a few. KAHIT GAANO KALAKI ANG GROWTH RATE, kung dinu dugas lang ng mga kawatan sa gobyerno, it does not mean anything!!!

  • nennen12345

    Thanks to the good leadership of President Aquino!

    • zeroko

      Good leadership pala. He he he. Good leader ba si Lacierdo who insisted to go to Naga even if the tower already closed it? Good leader ba siya na kahit na sabi ng pilot na b abalik sa Mactan, tuloy parin sa Naga ang one engine Aricraft? 

      Eto naman si PUno, observer lang sa PNP doon sa P3.4 billion pesos or something gun deal, nakialam at directang pumunta sa Israel para kausapin ang gun manufacturer. Tapos, kasama pa niya ang isang banned importer dahil sa anomalya. He he he. Nagrisign ang kumag dahil na check-mate siya sa Blue Ribbon Committee wherein Senator Santiago Defensor really grilled him. The lady Senator said,

      “Observer ka lang, bakit ka nakikialam to the point of calling a meeting to the PNP Generals who are involve in the gun purchase. ”

      “Hindi ba ang Observer ay strickly observer, tikum ang bibig. O, bakit ka nagpatawag ng meeting. Ikaw mismo? Bakit ka direktong nakikialam?”

      “Tapos, hindi ka lang nakialam sa PNP, pumunta kapa sa Israel para kausapin ang gun Manufacturer!”

      He he he. Nawalan ng 5 lbs na body weight is PUno noong na grill siya ni Senator Defensor. He he he. Para siyang sinasakal sa leeg. Hindi siya makalusot. Tuloy, nag re-sign. O, good leadership ba yan?

      • Ding


  • MonMayuga

    “I congratulated the Filipino authorities for their excellent economic stewardship during difficult times,…” said Christine Lagarde, head of the International Monetary Fund.  Now if that is not something to be glad about. 

    Gloria Arroyo would surely soar to high heavens if she were this country’s president when Madame Lagarde said that.

    • ramsor

      i think it was through GMA that Philippines was able to pay its debt to IMF.

  • WAJ

    Way to go Philippines! Pres. Aquino should go for another 6 years. The country needs your leadership, the people needs to be educated, reforms, etc… 

  • zeroko

    He he he! YOu are just being fooled by our Chinese Dominated Government. Look at our smuggling. It went up beating the two previous administration, and just look at it, PNoy is just in his two year term. Now, about the IMF statement that we beat the whole world. “Madaling mabola ang mga PNOY. The reason managing director Christine Lagarde said that is because she based her factor in the amount of dollar savings we have. What she does not know is that our Chinese Dominated Government is doing is the dreaded PPP or Public Private Partnership, which over-night, PNoy has sold billions worth of government assets. Then again, he is making a grand borrowing spree to fill up our coffer. In short, with this two items, PNoy was able to jack up our dollar reserve. Also, IMF did not know that in PNoy’s two year term, our government sovereign guarantee went up to a whooping 800 billion pesos.
    Mayroon ba kayong na randamang pagbabago sa buhay ninyo? Wala! Now, PNoy is going crazy how to pay our debt. Nariyan ang sin tax, tapos ngayong, ang tax- on -tex naman ang bibirahin nitong Chinese government. Ang sumatutal, kawawa parin tayo dahil nagpapabola tayo sa ating Chinese dominated government. 

    Kung tutuo ang mga Chinese sa gobyerno, dapat, bitawan na nila ang Pork Barrel, tapos gawing 10 percent na lang ang personal allowances ng Congressmen and Senators. Right now, running their office, Juan de la Cruz is paying to maintain each Congressman, the amount of 34 million pesos each congressman!

    • kulittwit

      Isa ka pang tanga! anong chinese dominated govt? Ang VP nognog! ang senate president at speaker espanol! certified PNoy haters are losers!LOL!!

    • Ding

      TANGAgang hindi kayo hihinto sa paninira niyo sa sariling bayan, huh?
      TANGAgang saksakan ng dudumi ang mga budhi ninyo, kung mayro’n man, huh?

  • zeroko

    You people, better read between the lines. “Daang matuwid” is tainted with “Daang paliku-liku.” Hirap parin ang tao. Yuong perang billiones ng DSWD, under Dingki Soliman, hirap siya ma-account. 

    Next year, PNoy will have a pork barrel of 312 billion pesos, he he he. Hindi ba kayo nalulula ke “Daang matuwid.” Yan ang sabi ng opposition. Buti na lang nariyan sila Suarez at Mila Magsaysay upang bantayan ang pork barrel ni PNoy. He he he. Pararaanin daw nila sa butas ng karayum kung saan talaga gugugulin ni PNoy ang laking pera. Pinagbili ni PNoy ang FTI o Food Terminal INcorporated ng P34 billion pesos sa Ayala, a 106 hectares government property, tapos, ngayon, P312 billion pesos naman ang pork barrel niya. Laking luho yan sa panahon ng taghirap!

    • Ding

      Talagang may mga maruruming kunsiyensiya pa rin ang gusto talagang masira ang Pilipinas…sa magkano mo ipinagpapalit ang mga kababayan at bayan mo?

    • puza65

      hehehehe sino ang iyaking si magsaysay wala di yan mananalo…ung orig na magsaysay ang iboboto namin…bakit kaya di kau matuwa na pagkatapos pagnakawan ng nakaraang presidente eh umangat ang pinas…inggit lang kau

  • kulittwit

    Pilipinas lang ang bansang na-upgrade!

    Great job PNoy!

  • ohnioknieves

    we must be proud as Filipinos, and let this momentum be properly addressed to our muslim brothers in Mindanao. The time is ripe for all of us to unite and help each other to make the Philippines the best in Asia. Let’s disseminate the good news in order to motivate our countrymen to do more good things. Explore the wonders of Mindanao, we have better islands than other Asian countries. Expedite all the important projects in Mindanao that will boost the economy and provide more employments. Let’s give proper education and livelihood to our muslim brothers in Mindanao. No more wars, let’s have peace and prosperity!

    • Ding

      Your patriotic kababayans support you in all of these great ideas and objectives…MABUHAY KA, KABAYAN.

      • ohnioknieves

        maraming salamat po.

  • Ding


  • Guest

     I know the Philippine mind and it is usually like this: When the people here see, everything’s okay, all get contented and then same game happens as what happened in the 1970s and 1990s.

    I will only be persuaded about all this development, once we surpassed Malaysia. Everything else  is a too early celebration which happened too many times already.

    And what also is a bit worrying is, when I hear the news, that from all the courses, the CHED wants to cut years for engineering from 5 to 4 years. This shows, what low regard engineering has in this country. You may say, that is negligible but sometimes those “negligible issues” can have long time grave issues.

    In order to keep up the current performance, more must be invested and focused on those hot spot subjects like engineering, natural science and R&D.
    In ship building we are already top, but we must maintain that. Of course, if GPH make the cuts in the wrong fields, then don’t complain, when Indonesia, India would surpass PH in some years.

    And of course, pls, more investments in infrastructure or we will face the notorious middle-income-trap. Now is the best time to build up and upgrade the infrastructure as long as the demographics are this good kasi even in the Phils the total fertility rate is approaching the replacement level of 2.1 babies per woman and will reach it between the middle of 2025 and 2030.

    Indonesia reached that level already but infra is in similar condition as in the Phils. The problem for Jakarta is, they now have a much smaller time window until 2025 to make all the sufficient (only) upgrades and build ups whereas the Philippines has time up to 2045. PH should take the advantage as long as it has it.

    Another failure like in the 1970s and 1990s will be unforgivable.

To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.

Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:

c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


editors' picks




latest videos