School of Business Holds Business Talk Forum on BSP $1B Commitment to IMF
By Gina Duran
Secretary, School of Business
Posted: Thursday, July 12, 2012

The first of a series of Business Talk Forums this schoolyear by the School of Business was held last 6 July, Friday at the Caridad Barrion Hall.  The Business Talk Forums project is being initiated by the Dean of the School of Business to provide students and other members of the community as well, continuing education focusing on current issues and events through sharing of resource persons and practitioners. In the same light, it was the first collaborative project of the Dean, the Presidents of the student organizations in the School of Business and the Student Council Chairperson for Student Organizations.

The event started by an opening prayer by Ms Raisa Nagrampa of the Student Council, followed by the opening remarks of Dean Ramon Mañalac.

The forum dealt with the hot issue on the $1B commitment of the Bangko Sentral ng Pilipinas (BSP) to the International Monetary Fund (IMF).  Entitled “Why Lend Not Spend?”, the forum was attended mainly by the business major students and a number of faculty members from the School of Business and the School of Arts and Sciences.  The resource speaker was Ms. Wilhelmina C. Mañalac, Managing Director of the International Sub-Sector, Bangko Sentral ng Pilipinas (BSP).  Ms. Mañalac was a two-time Philippine Representative to the International Monetary Fund (IMF), Washington DC. Her first stint with the IMF was as the Assistant to the Executive Director and the second was Alternate Executive Director in 2006 -2008, the highest position a Philippine Representative can be assigned in the IMF.

As an authority on the subject, Mrs. Mañalac immediately made clear the rationale for the BSP’s $1B commitment as a support to the global efforts in stabilizing the word economy and maintaining its growth path. As a member of global community of nations, she said that it is also in our interest to ensure economic and financial stability across the globe. “If the Europe region deteriorates and its financial markets become dysfunctional; exports, overseas Filipino (OF) remittances and investments to the Philippines will be reduced.” Mrs. Mañalac stressed.  In a nutshell, she stated that the country has strong macroeconomic fundamentals, particularly the strong balance of payments and external position. The US$1 billion commitment to the IMF can be thought of as a means to diversity the portfolio of the BSP.   The BSP is the principal participant in this arrangement and not the National Government. Loan resources to the IMF will be coming from the BSP’s international reserves.  There will be no budgetary outlay from the National Government.  An important fact for many to understand is that the reserves of the BSP are not part of the national budget.  And if and when the commitment is called by the IMF, there will be no change in the level of reserves which will remain strong and sound.

In answer to a question on how the National Government may benefit from this autonomous transaction of the BSP, Ms. Mañalac said that whenever BSP realizes income from its investments and loans, it gives 70 percent of said profit income to the National Government. On the contrary, when BSP losses in an investment venture, it absorbs the total loss by itself.

The forum ended with the students confident that they now understand fully the issue from the lucid explanation by the resource speaker.

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