The International Monetary Fund (IMF) said the Philippines has not reported all its financial guarantees and urged the government to properly disclose its obligations.
Authorities have issued non-central bank guarantees equal to 47 percent of gross domestic product (GDP) but have only reported those equal to 31 percent of GDP, the IMF said in its Fiscal Transparency Evaluation report prepared by a staff team based on information as of May 2014.
“There is a range of other guarantees on issue that could cause a problem,” the IMF said in the report, released on June 30, citing guarantees to homeowners by state agencies and on old private-partnership projects. The mission discovered additional obligations through an incomplete survey of state-owned companies’ annual reports, it said.
The Philippine finance department didn’t immediately respond to a request for comment on the IMF report.
Still, President Aquino’s efforts to boost fiscal transparency are beginning to bear fruit, the IMF said. Since taking office in 2010, Mr. Aquino
has undertaken closer scrutiny of spending plans and has cut the validity of most project approvals to one year from two.
The government should survey all agencies and state-owned companies on outstanding contractual guarantees and create a regularly updated guarantee register, the IMF said. Issuance of guarantees should be considered within the budget process with a ceiling covering domestic and foreign-currency guarantees, it said.