Diokno calls on World Bank, IMF to scale support in response to global polycrisis

Finance Secretary Benjamin Diokno stressed the role of the World Bank Group (WBG) and International Monetary Fund (IMF) in supporting countries, especially emerging markets and developing economies (EMDEs), in combating the multiple global crises during his intervention at the 2023 Intergovernmental Group of Twenty-Four (G-24) Ministerial Meeting on April 11, 2023 (Eastern Daylight Time) in Washington, D.C., U.S.A.

“The polycrisis we’re facing threatens to reverse the years of progress we’ve made towards poverty reduction and shared prosperity. Together, we must be decisive in tackling these challenges,” he said as the First Vice-Chair of the G-24 Bureau and the WB Governor for the Philippines.

The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) coordinates the position of developing countries on monetary and development issues in the deliberations and decisions of the Bretton Woods institutions (i.e. the WBG and IMF).

With the theme “Securing Sustainable and Inclusive Growth Amidst Emerging Challenges”, the Ministerial Meeting served as a platform to discuss key areas that need expanded support from the multilateral finance system.

Secretary Diokno raised four areas that need to be addressed – inflation, climate, international tax reform, and ongoing reforms to the Bretton Woods institutions.

He shared that Philippine inflation eased to 7.6 percent in March 2023 from 8.6 percent in February. However, it continues to remain at elevated levels due to high food and energy prices.

The Philippine government has been aggressive in mitigating the effects of inflation through the promotion of food and energy security and the provision of timely and evidence-based recommendations considering global and regional developments.

Secretary Diokno also stressed the urgent need to respond adequately to the climate crisis, saying, “This is clearly one of the biggest adversaries of development. When disaster strikes, climate-vulnerable countries such as the Philippines stand to lose the most.”

With this, he called for heightened global cooperation to facilitate a just green transition and for multilateral development banks (MDBs) to scale up climate investments by expanding private sector participation.

Secretary Diokno also underscored the role of international tax reform and domestic resource mobilization in financing sustainable and inclusive growth.

“[W]e fully support the continued efforts of the G-24 Tax Working Group to promote peer dialogue and cooperation on key tax challenges,” he said.

The Philippines is implementing its own Medium-Term Fiscal Framework (MTFF) that will allow the country to achieve its fiscal targets, manage debt, and sustain a high level of infrastructure spending.

Lastly, Secretary Diokno mentioned that ongoing reforms to Bretton Woods institutions through the WBG Evolution Roadmap and the IMF 16th General Review of Quotas create the opportunity to reinvigorate the multilateral system.

He emphasized that the proposed reforms to the Bank’s financial and operating models should not be at the cost of International Bank for Reconstruction and Development (IBRD) borrowers such as the Philippines.

As for the IMF 16th General Review of Quotas, Secretary Diokno said that enhancing the voice and quota of EMDEs at the IMF should be a key consideration in recognition of their growing share in the world economy.

“[W]e look forward to continued discussions on these efforts that will arm the World Bank and the IMF to better support economies against future shocks,” he said in closing.