PH boosts “statistical citizenship” as IMF creditor-member

Published April 17, 2021, 7:00 AM

by Lee C. Chipongian

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the Philippines, as one of the International Monetary Fund’s (IMF) creditor-member, will build-up its “statistical citizenship” to strengthen its surveillance system and to communicate the country’s good credit standing.

A step further to doing this is the adoption of the IMF’s Balance Sheet Approach (BSA) which the BSP started reporting last year, in the middle of the COVID-19 pandemic. The first September 2020 BSA report covered the fourth quarter 2018 to fourth quarter 2019 period.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno (MB file)

“The Philippines is one of the few countries that publishes a BSA report regularly,” Diokno said during his “GBED Talks”.

He said the BSP will further strengthen the compilation of the Philippine BSA – “not only to enhance the (BSP’s) financial surveillance toolkit, but also to contribute to the statistical information and services that the Philippine Statistical System provides to the public.”

As an IMF member, and a creditor-member since 2010, the BSA as input to the country’s sectoral balance sheets, is part of the nine data categories of the IMF Special Data Dissemination Standard-Plus that the BSP complies with. “Adherence to this will improve the country’s statistical citizenship, which can favorably contribute to our credit standing,” said Diokno.

The BSA also improves the BSP’s identification of possible risks and vulnerabilities to financial stability, and serves as an early warning system, one of many employed by the BSP. As a surveillance tool, it also determines financial interlinkages between and among various economic sectors. The report likewise summarizes the outstanding gross and net financial asset and liability positions of the domestic sectors of an economy and the rest of the world (ROW), presented in an interconnected manner for analysis of exposures of each sector from a whom-to-whom basis. 

“With the BSA, the BSP can identify potential risks and vulnerabilities within and across sectors, relate these to the transmission channels, and formulate policies aimed at averting or managing a crisis,” said Diokno.

The BSA is quarterly and is publicly released within six-months after the reference quarter. 

The latest report was as of end-third quarter 2020, where the BSP noted a 90.8 percent decline in net external liability position versus the ROW to P140.7 billion from P1.5 trillion same period in 2019. This is an improvement in the country’s net debtor position against the ROW. 

Because of the strong and sustained external payments position, the Philippines’ membership to the IMF has evolved from a debtor-member to creditor-member in 2010. This was four years after the Philippines prepaid all its outstanding debt to the IMF resulting to its early exit from its Post-Program Monitoring Arrangement in 2006.

The BSP is also a member of the IMF in its own right and in 2010, the Philippines through the BSP became a participant to the Financial Transactions Plan of the IMF. It is also a participant to the $521 billion IMF New Arrangements to Borrow which is a lending facility.