BSP to Loan IMF 1 Billion Dollars to Help Bailout Europe

"MALACAÑANG on Tuesday allayed concerns over the $1-billion loan of the Bangko Sentral ng Pilipinas (BSP) to the International Monetary Fund (IMF) and reminded those strongly opposed to the move that the BSP, under the helm of Gov. Amando Tetangco Jr., has consistently shown prudent fiscal management and stewardship." (source)

You know shit just got real when the IMF will borrow money from our central bank so they can help the bailouts in Europe. Nothing in that previous sentence makes sense to me. A third of our population still lives at less than 2 dollars a day and yet our central bank is invoking authority to lend a billion dollars to the IMF (when technically we are already in debt to them) to give to the eurozone countries that need bailing out like Greece, Ireland, Portugal, Spain. See, it all seems senseless. And by bailing out, it merely means giving all this money to their bankers. Here's MEP Nigel Farage explaining the irrationality of all this as the EU discusses bailing out Spain:

Nigel Farage on the Spanish Bailout

The idea is that they're just buying each other's debts. They can't even do it on their own anymore that they're asking for help even from countries like ours who have far more needs in growth and development. The justification, I am assuming, is that if we do not help the bailouts then it will all be catastrophic for the whole world. When really, this "catastrophic" disaster, the collapse of the EU seems  inevitable. One day, no matter who they borrow from, they just won't be able to buy each other's debts anymore. It's not going to work. We, too, are in debt. Borrowing from those in debt to buy someone's debt, it's just an absolutely irrational cycle.

I actually just wrote about all of this the other day (see Nigel Farage predicts Euro Crisis).

"In a statement, [Sen. Ralph] Recto said he is not opposing the government’s decision but said that the BSP has no sole proprietary rights over the Philippines’ dollar reserves. He added that the BSP should first request for a consensus or secure appropriation cover from Congress." (source)

Again, the executive branch feels like they can do whatever they want without the consent of the people or the people's representatives. That's ideally the point of the separation of powers. It's so that the executive can't just go around lending a billion dollars to people. But are these reserves really under the control of congress?

This is where the separation of powers get blurred. BSP will claim that they've already been given mandate to govern on the reserves as they wish. The IBON Foundation's different take on the issue (see IBON explains BSP loan to IMF) even reports that we've been lending to the IMF for some time now.

As a libertarian, I obviously don't agree with the sentiment that this 1 billion dollars should instead be spent by government for welfare or infrastructure. The IBON article above even explains that these reserves are separate from the government's budget. These are dollar reserves. Meaning the paper money printed by the Federal Reserve eventually become our reserve. This is paper lent to us as to give value to our paper.

Again, I introduce a position that's probably so different form the left/right paradigm. I want to expose the immorality of monetary policy that is monopolized. Just look at how ridiculous the whole Euro crisis has become. The reason they get to buy each other's debts is because all this is just artificial. The interest rates are artificial. The money is artificial. The markets are already rejecting all of it. 

If we do not spend within our means and take care of our debt and rethink the real role of government, we will end up just like Europe. Having the concept of governments and money based on debt is all so immoral.


  1. The quality of your blogs and articles and worth appreciating.
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  2. If we do not spend within our indicates and manage our economical obligations and reevaluate the actual part of government, we will end up just like Europe. Having the concept of government government bodies and money based on economical debts are all so incorrect.

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  3. That money is going to help organized crime to curb their version of globalization. That means they will have less money to strengthen organized crime in other countries. I don't you know this but globalization is the reason why billions of people are not hungry anymore (through trade collaboration and investments check the green revolution)

  4. Millions are out of poverty in India and china. That because of capitalism which is really connected to globalization now a days.

    Think of it like this, authoritarian regimes is especially attractive when there is economic turmoil. This bail out will ease economic turmoil.

  5. Also, organized crime flourishes in economic hardships. What they do is buy struggling small business because they are the only ones with money. That increases money laundering and turns dirty money to clean money, thus evading the police. On top of that they in engage in globalization which as been proven to increase profit.

  6. By giving mney to europe, the money will be used to curb the sphere of influence of organized crime.

    Also, the government system is still generally corrupt. There will be dirty senate and congress members who will steal the money, ala pork barrel scam.

  7. The point is organized crime will grow because they will globalize unless the governments in Europe stops them. If they are left alone they will strengthen weaker ethnic organized crime syndicates in smaller countries.philippines is one of them. If left unchcecked the world will have less secure borders and with that acts of terror by commies, facists and Islamic extremists will be more likely.


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