IMF CLARIFICATION ON APRIL PHILIPPINE REPORT, CONGLOMERATE RISK

*From: *"Peiris, Shanaka Jayanath" <SPEIRIS@imf.org>
*Date: *Wed, 17 Jul 2013 07:28:51 +0000
*To: *'maguirre@dof.gov.ph'<maguirre@dof.gov.ph>
*Subject: *Final 
 There have been a number of media queries following an article published
in a newspaper yesterday that covers the IMF’s view on conglomerate risks.
I wish to clarify that this article covers one of the many risks identified
in the “risk assessment matrix” of the 2013 IMF Article IV Consultation
staff report discussed with the authorities in January 2013 and published
in April 2013. It should be noted that one of the innovations in the wake
of the global financial crisis and addressed in the IMF’s 2011 Triennial
Surveillance Review has been the incorporation of risk assessment matrices
(RAMs) in IMF Article IV reports. RAMs are now included in most country
Article IV staff reports and lists events that could materially alter the
baseline path (the scenario most likely to materialize in the view of IMF
staff). The relative likelihood of risks listed is the staff’s subjective
assessment of the risks surrounding the baseline at the time of discussions
with the authorities. 
The RAM for the Philippines in the 2013 Article IV Consultation noted a
number of global and domestic risks including the low likelihood of risk
and potentially medium macro-financial impact of a highly leveraged
conglomerate failure at the time of Article IV discussions held in January
2013. There was no identification of a particular company. Other risks to
the Philippines listed include incomplete delivery of euro area policy
commitments and fiscal policy shock in the United States; protracted period
of slow European (or global) growth; capital inflow reversal affecting EMs,
accompanied by a strong unwinding of asset price overvaluation; and
domestic asset price bubble fuelled by abundant liquidity. Notwithstanding
these risks the 2013 Article IV consultation staff report presents a
favorable economic outlook based on the solid macroeconomic fundamentals of
the Philippines. Please see the IMF.org website for the full report on the
Philippines for more detail.**** 
** ** 
** ** 
IMF Resident Representative to the Philippines**** 
Room 407, 5-Storey Building **** 
Bangko Sentral ng Pilipinas**** 
Malate, Manila, Philippines**** 
Tel: (+63-2)708 7484**** 
Fax: (+63-2) 708 7483 **** 
** ** 
-- 
Belle Maestro-Arceño
Public Relations
Office of the Secretary
Department of Finance 
Mobile  +63 908 894 4893
E.mail   barceno@dof.gov.ph
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