Official sources said the Department of Finance has included the payment for the IMF membership dues in the P1.05-trillion budget. Congress will be deliberating on the new budget this week and the objective is to sign it into law by March.

The BSP has been advancing NG payment to the IMF since 2003 and up till last year, the central bank has been negotiating with the DOF on the type of instruments it will issue as payments, for example zero-coupon bonds.

Finance officials were saying earlier that BSP should be the one shouldering the subscription fees to the IMF since they are the one who seats on the board of the multi-lateral agency. "BSP calls the shots on who to send there and when," says one source.

However based on the IMF’s article of incorporation, they only recognize the NG as member and therefore membership dues are billed under "Philippines" and not the BSP.

The central bank however pays for its own subscription obligations to the World Bank.

National Treasurer Omar Cruz said last week that the government is prepared to pay the BSP "in cash" as soon as the Executive Technical Board and the Development Budget Coordination Committee clears the check.

Cruz, who will announce a better-than-expected 2005 budget deficit today, said funding is not a problem and that the NG will pay the advance onetime.

In 2004 the government issued promissory notes to cover P6 billion of its IMF dues under its ninth General Review of Quotas. However this amount has now matured to P13 billion.

The Department of Justice has already ruled that the said IMF dues should be paid by the NG accounts but unfortunately, the DoF has no cash to pay for it, until now. "The amount is getting bigger as it matures (which the BSP has to keep paying for the NG)," one BSP source said earlier.

Monetary authorities maintain that the government should assume payment of the quota subscription since the IMF is an association of governments and not of central banks.

But then the NG insists that the BSP bankroll the country’s membership to the IMF since it is the central bank that benefits most from the international lender’s standby facility, which is an emergency loan that the IMF extends a member-country as back up for foreign exchange deficiencies.