Monday, 22 June 2009

Philippine president Arroyo supports proposal for Asian version of IMF

AFP with a report from Alexis Douglas B. Romero

TOKYO — President Gloria Macapagal-Arroyo supports wider cooperation in stabilizing Asia’s financial market, including creating a regional version of the International Monetary Fund.

In an interview with Japanese media on Saturday, she praised as a great success the expansion of the Chiang Mai Initiative (CMI), a currency swap framework to guard against financial crises, the Nikkei business daily said.

The scheme, involving the Association of Southeast Asian Nations (ASEAN), Japan, China and South Korea, was launched in 2000 following the 1997 Asian financial crisis.

The ASEAN-plus-three agreed in May to expand the CMI’s size to $120 billion from the original $80 billion proposed in 2008. Japan and China will each contribute $38.4 billion and South Korea $19.2 billion.

"The Asian bond market initiative is something we should now push," Mrs. Arroyo was quoted by the Nikkei as saying on a visit to meet Prime Minister Taro Aso and business leaders.

The president was referring to efforts by regional governments and private companies to revitalize the market by issuing bonds denominated in local currencies.

Mrs. Arroyo said the idea of establishing an Asian version of the IMF should be the next subject to be studied by the region to strengthen its financial stability, according to the Nikkei.

She said she "agrees" with the idea, it added.

"I am even in favor of a pan-Asian economic community that would cover not only the East Asian Summit, but other parts of Asia like the Middle East, Central Asia, South Asia and Oceania," Mrs. Arroyo said.

In Manila, deputy presidential spokesman for economic affairs Gary B. Olivar said the creation of an Asian version of the IMF could help spare the region from the impact of a financial crisis and would promote greater economic integration.

"Although we support free trade, we have to strike a balance. While we engage with the world, we also have to be self-sufficient," he said in telephone interview.

"We should also strengthen intra-regional trade and financial flow. I can say that she (Mrs. Arroyo) is in favor of a close economic integration in the region."

An economic partnership agreement between Tokyo and Manila took effect last December, opening the door for Philippine nurses and caregivers to work in Japan.

While in Tokyo, Mrs. Arroyo obtained a Japan Bank for International Cooperation guarantee of up to $1 billion for a planned Samurai bond offer.

Manila and Tokyo also signed two official development assistance loans worth $456 million, and agreed to convene a joint working group that will draw up a bilateral social security agreement.

Mrs. Arroyo yesterday left Tokyo following a four-day visit and will proceed to Brazil where agreements in agriculture and bioenergy are expected to be signed. She is scheduled to return to Manila on Friday.

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