BSP backs creation of Asian Monetary Fund
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said yesterday that the BSP is supporting the proposed creation of an Asian Monetary Fund (AMF) which has been gathering momentum in the region.
Tetangco told reporters that Asian central banks are already moving in the direction of creating a regional counterpart to the International Monetary Fund (IMF).
The IMF itself has shot down the proposal but according to Tetangco, regional cooperation has become even more critical because economic relations within Asian countries have become even more intertwined.
“What is significant now, aside from financial facilities that could be provided by an AMF, is the regular policy dialogues,” Tetangco said. “If there is any policy that needs to be discussed, it can be taken up for the good of the region as a whole.”
Tetangco said the AMF would also be more able to anticipate potential problems because a more focused organization could have easier and better access to people on the ground.
“We will support such an initiative as long as we would avoid duplication,” Tetangco said. “The role of such an organization should be complementary to what other multilateral agencies are already doing.”
The proposal to create an AMF gathered new momentum as central banks in the region raised fears of future financial shocks similar to the crisis that hit the region in 1997.
Regional financial leaders said the AMF was made necessary by the inability of the IMF to adequately cope with the Asian crisis.
But more significantly, Tetangco said there was no regional communication even close to the developing cooperation that was present today.
“I can not over-emphasize the importance of regional cooperation. This was absent before the 1997 crisis and had it been present, a lot of it would have been avoided,” he said.
The IMF was also under fire for prescribing economic and financial measures that affected the political balance in some countries in the region.
The AMF was initially proposed to be formalized out of the Chang Mai Initiative which was an offshoot of the Asean Swap Arrangement to include
The AMF was intended to assisting member countries experiencing difficulties with their balance of payment, a move largely spearheaded by
Subsequent proposals expanded the AMF to include the
When it was first brought up, however, the IMF said it did not support the thinking that any region had unique requirements that would necessitate the creation of a regional monetary fund.
The criticisms against the IMF, especially during the 1997 crisis, on the other hand, stemmed from its inability to anticipate the contagion and wield its gigantic bureaucracy to be able to act quickly.
The AMF was seen as a possible institution that would be more immediately responsive to the region’s concerns, especially in the institution of an early warning system.
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