Purisima says IMF not as forceful on euro zone crisis

Posted at 10/22/12 3:56 PM

MANILA, Philippines - The International Monetary Fund (IMF) should exercise more force to contain the euro zone crisis which also pose a threat to the Philippines' economic growth, the Finance department said.

Finance Secretary Cesar V. Purisima said he felt that the IMF is not being "forceful" enough in dealing with the lingering euro zone crisis as it had been in the Asian financial crisis back in 1998.

"Problems in Europe are not just the economy and financial, but also political. The beauty of institutions like IMF [is that] they are apolitical [so] maybe they can help shape discussion, in particular in euro zone," Purisima said.

"[The euro zone crisis] is a business of everyone, given that it's global. Everyone is affected by challenges and in emerging markets, we still have a lot of poverty to address," he added.

The debt woes of said region has continued to drag global growth, even prompting the IMF, in its October World Economic Outlook, to lower its global growth projections to 3.3% and 3.6% for 2012 and 2013, from the 3.5% and 3.9%, respectively, that were made in July.

Mr. Purisima said that the government will continue to monitor developments abroad to be able to respond accordingly to any ill effects on the Philippine economy.

"We will continue to monitor developments, not only in the eurozone, but also in the US, China and the whole global economy, to be able to respond correctly and properly to the challenges that may pose risk to the Philippine economy," Purisima said.

The Philippine economy has expanded by 6.1% in the first half, surpassing government and market expectations.

"We must remain vigilant to be able to sustain this," Purisima said.

The government expects the economy to grow by 5-6% this year from the dismal 3.9% growth recorded in 2011.

"We will continue to focus on the fundamentals, spend on our infrastructure development and social programs to boost employment, while being mindful of our fiscal position. In this way, we can make sure that the Philippine economy remains strong and on track toward achieving sustainable and inclusive growth,” Purisima said.

“More importantly, we will continue our drive for reforms at the bureaucracy as we continue to believe that good governance is still good economics,” he added.

IMF this month maintained its full-year growth forecast for the Philippines at 4.8%, the same projection it made in July. Risks to the growth, the IMF said, are the worsening problems in the euro zone and the United States.