Good News: BSP says Philippines loaned money to other nations

You know how we always hear that the Philippines is borrowing money? Well, this bit of news will surprise you. The Banko Sentral ng Pilipinas revealed that the Philippines is now a creditor nation. That’s right, the Philippines loaned money to other nations!

GMA News writes,

“With its record-level foreign exchange reserves, the Philippines since 2010 was a lender to Greece, Portugal, Ireland and other troubled economies of Europe to the tune of $251.5 million, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

The country also committed to contribute $4.55 billion to the $120-billion Chiang Mai Initiative Multilateralization (CMIM) fund put together by China, Japan, Korea, Hong Kong, and the Association of Southeast Asian Nations.”

Last year, the Banko Sentral noted that the Philippines ended with a US$75 billion dollar gross international reserve.

Cocoy Dayao

Cocoy is the Chief Technology Officer of Lab Rats Technica, a Digital Consulting company that specialises in DevOps, iOS, and Web Apps, E-Commerce sites, Cybersecurity and Social Media consulting. He is a technology enthusiast, political junkie and social observer who enjoys a good cup of coffee, comic books, and tweets as @cocoy on twitter.

Cocoy is also the Managing Director and Editor-in-Chief of the ProPinoy Project.

Cocoy considers himself to be Liberal.

  • Deborah Koval

    This is an indication of growth amidst adversaries and never ending political issues which I’m not really sure if it’s helping.

  • valeria092012

    PayDay Loans money are via research. While studying, the person will come across lots of loan companies providing loan. But, the want is the fact that each and every provide should be in contrast to one more on the foundation interest rate, expense involved and its terms.

  • Doy Santos

    In January 2011, I was ridiculed for suggesting that we use our foreign reserves to lend to countries like Greece, Spain or Ireland. It seems that this idea has come to fruition. 

    • cocoy

      @google-b3df5b7e81e9e72921282b7737159f05:disqus  Are you writing a follow up to it…? Thanks! 😀

    • J_ag

      If the BSP followed your advice and bought Greek paper through the secondary in Jan 2011, the BSP would now be facing a 50% haircut. Plus the forced swap with longer terms and a lower rate would bring the haircut to close to 70%.

      Damned good suggestion then.   Senior debt holders of Greece to include the IMf, and the ECB and Euro sovereigns are not included  in the haircut.. 

      Please note the Philippine State has to borrow money to pay for the IMF quota payments from where loans to countries like Greece are sourced.   

      • Doy Santos

        The ones who are affected by the “voluntary” writedowns, the so-called “haricuts” are private bondholders such as banks, hedge funds and pension funds. Obviously, if the National Government were to lend to the Greeks it would have had to have been through what has now been accomplished through the IMF.

  • J_ag

    Why the surprise when we have been lending billions to the U.S. treasury since the early 90’s??

    We remain a net importer of capital which is quite different from us lending what we have in our reserves since we operate under a liberal capital account regime with the dollar as the foundation of our reserve system. 

    We also lend our yen reserves to the Japanese government. The bulk of our reserves are in dollars and yen. 

    As for the Chang Mai Initiative we signed on to currency swap agreements with China, S. Korea and Japan for them to support us in times of financial crisis in the financial markets as a support pillar so as not to hamper trade. 

    It is surprising that many in the Philippines still can not get used to the fact that we are moving into a de facto common currency arrangement with the U.S. 

    • cocoy

      Would you mind writing a blog entry on that @26d427eea79701ae99aa3c50270a407c:disqus ? Thanks.

      • J_ag   

        I would love to write about what I posted but I am reluctant to as the level of understanding of the power of a State to issue debt, fiscal and monetary policy  requires competency in financial economics. 

        No disrespect meant to Mr Santos.  How can you be a net creditor to the world when our payments to the IMF come from sovereign debt borrowings and not from the countries savings. 

        The State is managed and administered by the government hence when the word State is mentioned in this context it means the government. 

        Our State cannot even pay for the equity requirements of the BSP and yet the State through the BSP owns $70 billion in foreign currency, SDR’s and Gold.

        The State through the BSP has the sovereign power to stockpile foreign exchange by issuing new pesos. 

        The BSP stockpiles dollars to prevent volatility as demand for dollars can rise and fall drastically affecting monetary and fiscal policy. 

        The dollar reserve system is a product of historical forces.