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The Philippines will maintain its status as a net creditor in the Financial Transactions Plan (FTP) of the International Monetary Fund (IMF) until January 2025, which allows the country to provide financial assistance to other member countries in need.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the Monetary Board approved the continued participation of the Philippines in the FTP from August 2024 to January 2025.
'This means that the country has maintained its net creditor position in the IMF, which underscores the country's sound macroeconomic fundamentals,' the BSP said.
'The Philippines' strong external position supports the country's development goals, which will benefit the Filipino public,' it added.
The FTP is a currency exchange arrangement between the IMF and eligible members to manage the IMF's financial resources. It outlines how funds from member countries are distributed to those needing financial support.
As a net creditor, the country contributes to the IMF's pool of resources, which are used to provide loans to other member countries facing balance of payments crises. The IMF pays interest, called remuneration, to the FTP participants like the Philippines.
In selecting members for participating in the FTP, the IMF considers the strength of the member's balance of payments and reserve position, the stability of the exchange and financial markets, as well as the adequacy of the country's international reserve assets.
This is to ensure that the participating country can fulfill its obligations during the specified FTP period.
The Philippines first participated in the IMF's FTP arrangement in August 2010, in line with the special authority granted by the president of the Philippines to the BSP.
'Given that the country's external position remains strong, with ample gross international reserves to withstand external shocks, the country has been assessed to be eligible for continued participation in the FTP,' the BSP said.
'This puts the Philippines in a favorable position to remain as IMF's financial partner, which indicates the country's commitment to contribute to the global financial safety nets and support the resolution of possible crises,' it added.
The country's balance of payments (BOP) position stood at a $62-million surplus in July, a turnaround from the $53-million deficit a year ago and the $155-million shortfall in February.
For the first seven months, the BOP surplus fell by 31.8 percent to $1.5 billion from the $2.2 billion surplus recorded in the same period in 2023. The BSP sees the country's BOP surplus at $1.6 billion this year.
The BOP surplus reflects a gross international reserve level of $106.7 billion as of end-July, up from $105.2 billion as of end-June.
The level is equivalent to around 7.9 months' worth of imports of goods and services and payments of primary income. It is also about 6.1 times the country's short-term external debt based on original maturity and 3.8 times based on residual maturity.
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