BIZ BUZZ: IMF called out, again

First, it was Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. who called them out. Now, it’s Finance Secretary Ralph Recto.

We’re talking about the International Monetary Fund (IMF), which recently urged the government to immediately restore the capital of state-run Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) following their hefty contributions to the Maharlika Investment Fund.

That was one of the many policy recommendations that the Washington-based institution had written in its latest country report, which was a product of last year’s IMF staff visit here.

But the thing is, the visiting IMF team “never” raised such concerns about the two banks’ capitalization during their consultations with government officials, Recto said in an interview with reporters.

So, the news about the IMF’s recommendation definitely took the finance chief by surprise.

Word about the Fund’s advice went out so fast that both Landbank and DBP had to assure the public that they remain financially strong and stable.

“You know, they never went to us to talk to us about any of that,” Recto said. “That was never in any of our meetings.”

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It may be recalled that the IMF had agreed to revamp the group of economists assigned to the Philippines—now a net creditor to the Fund—after BSP chief Remolona complained in 2023 about the quality of the assessment team that had come to town to look at the public sector.

Will there be more improvements in the conduct of the next IMF staff visit? We hope so.