The Philippines pledges $1 billion to IMF

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Philippines Central Bank Governor Amando M. Tetangco Jr

Soaring growth and reassuring economic fundamentals have made the Philippines secure enough to grant a $1 billion loan to the International Monetary Fund (IMF) in aid of the ailing euro zone.

A net borrower of the IMF until 2006, the Philippines is now among the fastest growing economies in East Asia, expanding 6.4 per cent in the first quarter of 2012, which was the highest growth rate for that period in the region behind China and ahead of Indonesia.

“Today, our economic fundamentals are sound, our banks are able to meet domestic credit needs, and we are capable of lending $1 billion from our international reserves to the IMF,” said Amando M. Tetangco Jr, the governor of the central bank of the Philippines, at the recent G20 meeting in Los Cabos in Mexico.

“We are a member of the global community of nations and it is also in our interest to ensure economic and financial stability across the globe,” he added.

Among other ASEAN countries that also have pledged to support the IMF crisis fund were Malaysia and Thailand, each committing to a $1 billion loan as well. China is leading the lenders’ list with $43 billion, followed by Brazil, India, Russia and Mexico with $10 billion each.

For the Philippines, the vital signs of the archipelago nation are clearly showing steady resolve. The central bank has accumulated $70 billion in reserves and achieved a reduction of interest payments on its debts, leading Standard & Poor’s to move its credit rating to just below investment grade.

The Philippines has a young, highly English-literate and urbanised workforce

The young population of 94.5 million is exciting economists the most about the Philippines. 61 per cent of the Filipinos are between the ages of 15 and 64, and the working population in the urban centers is expected to continue growing.

Some 92.5 per cent of Filipinos maintain English literacy, providing the country’s outsourcing sector a competitive edge that has lead the BPO industry to grow 46 per cent since 2006.

More monumentally, last year the Philippines became the world’s leading provider of voice-based business outsourcing services, surpassing India for the top position.

However, the country is still home to crushing indigence. The poverty rate between 2003 and 2009 was slightly increasing from 24.9 per cent to 26.5 per cent, according to figures from the Asian Development Bank.

The Philippines will have to generate more productive jobs to reduce its 7.3-per cent unemployment rate, analysts say.

The BPO industry, though a salient piece of the Philippines success story, currently employs only a drop in the bucket of the population. In 2011, call centres, for example, had some 683,000 Filipino staff.

Allocating more resources to social benefits such as affordable education could broaden the BPO sector and create a knowledge-based industry on top of the booming outsourcing market.

 

 

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Reading Time: 2 minutes

Philippines Central Bank Governor Amando M. Tetangco Jr

Soaring growth and reassuring economic fundamentals have made the Philippines secure enough to grant a $1 billion loan to the International Monetary Fund (IMF) in aid of the ailing euro zone.

Reading Time: 2 minutes

Philippines Central Bank Governor Amando M. Tetangco Jr

Soaring growth and reassuring economic fundamentals have made the Philippines secure enough to grant a $1 billion loan to the International Monetary Fund (IMF) in aid of the ailing euro zone.

A net borrower of the IMF until 2006, the Philippines is now among the fastest growing economies in East Asia, expanding 6.4 per cent in the first quarter of 2012, which was the highest growth rate for that period in the region behind China and ahead of Indonesia.

“Today, our economic fundamentals are sound, our banks are able to meet domestic credit needs, and we are capable of lending $1 billion from our international reserves to the IMF,” said Amando M. Tetangco Jr, the governor of the central bank of the Philippines, at the recent G20 meeting in Los Cabos in Mexico.

“We are a member of the global community of nations and it is also in our interest to ensure economic and financial stability across the globe,” he added.

Among other ASEAN countries that also have pledged to support the IMF crisis fund were Malaysia and Thailand, each committing to a $1 billion loan as well. China is leading the lenders’ list with $43 billion, followed by Brazil, India, Russia and Mexico with $10 billion each.

For the Philippines, the vital signs of the archipelago nation are clearly showing steady resolve. The central bank has accumulated $70 billion in reserves and achieved a reduction of interest payments on its debts, leading Standard & Poor’s to move its credit rating to just below investment grade.

The Philippines has a young, highly English-literate and urbanised workforce

The young population of 94.5 million is exciting economists the most about the Philippines. 61 per cent of the Filipinos are between the ages of 15 and 64, and the working population in the urban centers is expected to continue growing.

Some 92.5 per cent of Filipinos maintain English literacy, providing the country’s outsourcing sector a competitive edge that has lead the BPO industry to grow 46 per cent since 2006.

More monumentally, last year the Philippines became the world’s leading provider of voice-based business outsourcing services, surpassing India for the top position.

However, the country is still home to crushing indigence. The poverty rate between 2003 and 2009 was slightly increasing from 24.9 per cent to 26.5 per cent, according to figures from the Asian Development Bank.

The Philippines will have to generate more productive jobs to reduce its 7.3-per cent unemployment rate, analysts say.

The BPO industry, though a salient piece of the Philippines success story, currently employs only a drop in the bucket of the population. In 2011, call centres, for example, had some 683,000 Filipino staff.

Allocating more resources to social benefits such as affordable education could broaden the BPO sector and create a knowledge-based industry on top of the booming outsourcing market.

 

 

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