Philippines with other 19 countries Pledges Billion Dollars to Boost IMF

20 Countries Pledges to Boost IMF (International Monetary Fund) to save Europe

1. Belgium - $13.2 Billion
2. Brazil - $10 Billion
3. Britain (UK)- $15 Billion
4. China - $43 Billon
5. France - $41.4 Billion
6. Germany - $54.7 Billion
7. India - $10 Billion
8. Italy - $31 Billion
9. Japan - $60 Billion
10. Mexico - $10 Billion
11. Netherlands - $18 Billion
12. Philippines - $1 Billion
13. Russia - $10 Billion
14. Saudi Arabia - $15 Billion
15. Spain - $ 19.6 Billion
16. Sweden - $10 Billion
17. Switzerland - $10 Billion
18. Singapore - pledged smaller undisclosed amount
19. South Africa - $2 Billion
20. South Korea - $15 Billion
21. USA - refused to pledge

President Aquino administration's pledge to lend $1 billion USD to the International Monetary Fund (IMF) on Friday drew mixed reactions.

A militant labor group slammed the administration's pledge, saying the funds should be spent for Filipinos suffering from widespread unemployment, poverty, malnutrition and hunger.

On the other hand, an administration ally in the House praised the government for agreeing to pitch in to the IMF's fund-raising efforts to bail out tumbling economies in Europe.

"Planet Earth to the Aquino government: The Philippines is still a poor country," the Kilusang Mayo Uno (KMU) said in a statement.

But Valenzuela Rep. Magtanggol "Magi" Gunigundo said the move to lend $1 billion from the country's gross international reserves to the IMF would "actually hit two birds with one stone."

KMU said the pledge, which was announced at the recent Group of 20 meeting in Mexico by Bangko Sentral ng Pilipinas governor Amando M. Tetangco Jr., would most likely be sourced from taxpayers' money and go to the IMF's "war chest" for helping economies distressed by the current severe economic crisis.

"What were they thinking? That amount can be used to improve social services such as education, health, and housing and build basic industries to generate employment," KMU chair Elmer Labog said.

"Where will the Aquino government get this huge amount? From a new tax measure, which will worsen the poverty and hunger being experienced by workers and the people?" he asked.

"We will earn interest and help our kababayans or overseas Filipino workers in Europe to keep their jobs by helping their economies survive the current turmoil," said Gunigundo. "If Europe's economy falls, our OFWs in the region will lose their jobs not to mention our exports will also fall."

Gunigundo said that while the Philippines does have its own problems, "we should have a global perspective considering that what happens in Europe will be felt in other regions such as Asia and the US."

Philippines with other 19

The country is one of an additional 12 that contributed to new crisis-fighting funds now amounting to $456 billion, the IMF said in a statement. The latest level is up from the $430 billion committed last April.

"Countries large and small have rallied to our call for action, and more may join," the statement quoted IMF Managing Director Christine Lagarde as saying.

The Bangko Sentral ng Pilipinas (BSP) said the country wanted to help promote global economic and financial stability.

"The BSP's commitment to the Fund's bilateral borrowing facility is the Philippines' show of support...," central bank Governor Amando M. Tetangco, Jr., said in a text message.

The new pledges to boost IMF resources were made during a recent G20 meeting in Los Cabos, Mexico, although the Philippines is not part of the group of major economies.

"Having facilities such as this in place does not indicate -- one way or the other -- that the view is such that the situation can worsen," Mr. Tetangco noted.

"Rather, prudence dictates that the best time to have safety nets in place is when you don't need them yet. The facility is there when it is needed," he added.

The Philippines is a participant in the IMF's Financial Transactions Plan (FTP). From the country's contributions, the IMF drew down 96.4 million special drawing rights (SDR) or approximately $148.9 million as of the end of last year.

Participation in the FTP since 2010 paved the way for the country' admission to the IMF's New Arrangements to Borrow (NAB) facility. The Philippines' commitment under this facility amounts to 340 million SDRs or about $524 million.

As of April, the IMF had drawn 34.7 million SDRs or $53.5 million from the NAB commitment to extend assistance to Portugal and Greece.

Dennis Botman, IMF resident representative, also welcomed the Philippines' new commitment.

"The [Philippine] government has made a generous contribution to the global firewall and the IMF is impressed by, and indeed grateful for, the strong support demonstrated by the Philippines," he said in an e-mail.

"This commitment will greatly help the collective endeavor to rekindle growth, restore confidence, and create jobs to put the global economy on the path of sustained recovery." Earlier this year, IMF made the call for additional resources to deal primarily with the euro zone debt crisis and its possible spillover.

BSP chief: $1B loan to IMF will earn interest, goodwill

Having near record-high foreign reserves of $76 billion, the Philippines is "capable of lending $1 billion" that will earn interest while helping other countries beset with financial problems, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. pointed out Wednesday.

 "The Philippines is supporting the global efforts to stabilize the world economy and maintain it on a growth path.  This is the reason why the Philippines is extending a $1 billion loan to the IMF," Tetangco said in a statement.

 "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.

 This pledge to the IMF fund marks the third time that the country has extended a helping hand to other countries that were in troubled fiscal waters. In the past months, the country pitched in for a fund to assist troubled European economies and another buffer fund, the Chiang Mai Multilateral Initiative.

Getting used to being a creditor nation

Tetangco recalled that the Philippines was an IMF borrower for 40 years until 2006.

"We finally fully paid our loans to IMF in December 2006 as the implementation of continuing reforms have made our economy stronger. 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," the BSP chief noted.

At the G20 Leaders' Summit in Los Cabos, Mexico, IMF managing director Christine Lagarde thanked the countries " large and small (that) "have rallied to our call for action, and more may join."

"I salute them and their commitment to multilateralism. As a result, total pledges have risen to US$456 billion, almost doubling our lending capacity," she said.

Lagarde explained that "(t)hese resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members. They will be drawn only if they are needed, and if drawn, will be refunded with interest." 

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Illegal China-bound 50,000 tons iron ore seized - Philippine Authority

[image from: Wikipedia]

Philippine authorities seized a huge amount of iron ore intended to be smuggled to China, as part of a long-running battle against illegal miners.

The 50,000 tons of iron ore, believed to be worth more than $2 million, were found stockpiled near a private wharf at a coastal mining town in the eastern province of Camarines Norte, mines bureau head Leo Jasareno said.

A cargo ship was seen anchored at a distance, and it was believed to be waiting for the ore to be loaded when the raid happened.

"The shipment was supposed to go to China and they were clearly intending to smuggle it out."

Jasareno said the ore was extracted illegally because the mining companies involved did not have a mineral export permit, adding one was suspected to be a front for a Chinese firm.

Initial estimates by the bureau's experts placed the shipment's value at $50 per metric tonne, or $2.5 million, he added.

The Chamber of Mines of the Philippines last year warned of Chinese companies using Filipino fronts to take advantage of a law reserving small-scale mining for locals.

The seizure last week came four months after the government deported eight Chinese nationals caught working illegally for a mining firm. More than 100 other Chinese have been detained for similar offences over the past two years.

In 2010, a diplomatic row broke out between Manila and Beijing after police detained but eventually freed 80 Chinese found working illegally at a mine site on the main island of Luzon.

The Philippines is believed to have some of the biggest mineral reserves in the world. The government estimates the country has at least $840 billion in gold, copper, nickel, chromite, manganese, silver and iron.

But the mining industry remains relatively small because of laws that discourage investment and a very strong anti-mining lobby led partly by many activists.

Hitching production in China

About 98% of iron ore is used to make steel - one of the greatest inventions and most useful materials ever created.

This very important element is also used for the metallurgy products, magnets, high-frequency cores, auto parts, paints, printing inks, plastics, cosmetics (eye shadow), artist colors, laundry blue, paper dyeing, fertilizer ingredient, baked enamel finishes for autos and appliances, industrial finishes. Black iron oxide: as pigment, in polishing compounds, metallurgy, medicine, magnetic inks, in ferrites for electronics industry.

In 2010, China led the for the highest iron ore production with an estimated of 900 million metric tons resulting to the fast getting scarce of the local resources and currently needs to import the materials from around the world to meet its demand.

With the rising demand of war weaponry, electronic products and high end technology equipment, iron ore demand will also keep rising. 

The getting scarce of natural resources of china will push their government to continue expanding going south or particularly the Philippines which is remained as the world's largest unexploited mineral reserves.

Scarcity of iron ore as a raw material of the production would hinder to produce a product because it is a no substitute element.  Recycling could be suitable but with the high demand, it could not meet the demand for mass production and it would hamper the output. In absence of this element, china could not produce valuable products needed to sustain and to save their downward trend economy. 

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