Gov’t reviews membership in int’l bodies to cut costs

The government is reviewing its membership in international organizations in order to pare down the cost of commitment fees, charges and dues that have accumulated over the last few years.

Sources revealed yesterday that an inter-agency task force has been created to conduct a full accounting and audit of international organizations where the government or its agencies were members.

These sources said the government had mounting commitment fees that were either not being paid or adding undue weight to the national budget. Although the fees, charges and dues are themselves not large, sources said the accumulated total was significant.

The review committee is composed of officials from the Department of Budget and Management, Department of Foreign Affairs and other agencies. Sources said its report would be the basis of the decision on which of the memberships would be retained and which ones would be terminated.

In 2002 alone, the government allocated a total budget of P776.263 million for various fees and charges, excluding the country’s membership quota to the International Monetary Fund (IMF) that is being advanced by the Bangko Sentral ng Pilipinas (BSP).

Membership obligations to international organizations, however, are considered foreign debt so they are automatically appropriated under the annual appropriations act.

The country’s membership obligations to the IMF is by far the biggest and most controversial, with the BSP and the Department of Finance (DOF) still arguing over which agency should shoulder the cost.

The DOF has already taken its case before the Department of Justice (DOJ) to determine whether it could compel the BSP to pay for the country’s membership dues to the IMF.

The BSP has been advancing the country’s quota payments to the IMF on behalf of the National Government, but the DOF had agreed to eventually repay the BSP for the advances that now amount to a total of P6.8 billion.

Despite its commitment to pay back the BSP, however, the DOF has asked for the DOJ’s opinion on whether the IMF membership payments should be permanently shouldered by the BSP.

"All things being equal, we would prefer that the BSP shoulder this quota since they are the official representatives to the IMF and our chief negotiator," said Finance Secretary Jose Isidro Camacho.

The BSP, however has, argued that membership to the IMF was not by agency but by government. Since it was the sovereign – represented by the BSP – that sat as a member of the IMF, it should pay for its quota requirements.

BSP sources revealed that the DOF had sought the opinion of the DOJ earlier this year as the BSP sent another demand letter to the DOF for the settlement of its P6.8 billion arrears representing the country’s quota requirements as member of the IMF.

The P6.8 billion was a one-time payment to the IMF for the country’s membership when the fund adjusted its membership quota. This quota is periodically adjusted depending on the performance of the global economy.

The Philippines’ quota is equivalent to 879.9 million worth of special drawing rights (SDRs), the currency used by the IMF. One US dollar is equivalent to 0.47 SDR which means that the country’s membership quota is equivalent to $413.553 million.

This quota entitles the Philippines to a vote equivalent to 0.4 percent of total votes in the IMF. By comparison, Thailand’s quota is SDR 1.081 billion, equivalent to a 0.51 vote while Indonesia’s quota is SDR 2.079 billion, equivalent to 0.97 vote.

The US has the single biggest block, equivalent to a 17-percent vote, followed by Japan which has 6.15-percent vote and Germany with 6.01 percent vote. France and the United Kingdom have voting power equivalent to 4.96 percent each.