BY JOCELYN MONTEMAYOR

PRESIDENT Arroyo left people puzzled yesterday after countries and institutions said they were unaware of a plan she announced to set up a regional fund to deal with the global financial turmoil.

Arroyo said on Wednesday the World Bank had committed to initially provide $10 billion to a fund to buy toxic debt and help banks in the region hit by the financial crisis.

Arroyo said the 10-member Association of Southeast Asian Nations, its three dialogue partners of Japan, China and South Korea, the Asian Development Bank and the International Monetary Fund could also contribute to the fund.

A World Bank official, however, said the bank has no plans to contribute to the fund, and the Asian Development Bank said it was too early to talk of contributions to the facility because the region remains economically strong.

Asean member Singapore said it was not aware of any such plan.

"We are not aware of any proposal for the ASEAN+3 nations to set-up a multi-billion dollar fund to buy toxic debts and help the region

World Bank officials said while the institution is committed to supporting countries in East Asia in dealing with the global financial turmoil, they denied Arroyo’s statement that they have "discussed commitments of funds at the regional level."

They added that they do not anticipate the establishment of a regional facility.

Reacting to the World Bank statement, Secretaries Margarito Teves of finance and Ralph Recto of planning said it was the IMF which committed $10 billion should a standby fund be put up.

The two economic managers are in Washington where they attended a recent meeting of Asean ministers with officials of the WB and the IMF.

Trade Secretary Peter Favila said Teves called him up a little past 5 p.m. yesterday to say that he and his staff had gone over their notes on the Asean meeting with the IMF-World Bank and saw it was the IMF and not the World Bank that made the commitment.

Recto, in a television interview, said the $10 billion IMF pledge is on top of its $1.3 billion facility for countries with balance of payments problems.

President Arroyo announced Wednesday during the oath-taking of new officers of the Union of Local Authorities of the Philippines and again in a dinner for the Asean 100 Forum delegates that an understanding for the creation of a standby fund was reached in Washington and that the World Bank has pledged $10 billion.

Favila said Arroyo based her announcement on a report made by Teves on the outcome of the first meeting of the Asean ministers with IMF and WB officials.

He said Arroyo, after receiving the report, directed Teves to push for the concretizing of the proposed standby fund during successive meetings.

Favila said in a second meeting, WB vice president for East Asia and the Pacific Jim Adams said they were more inclined to "providing the fund on a bank-wide global facility which appears not solely for Asean."

Favila said the shift to bilateral arrangements had not been relayed to Arroyo until Thursday morning and after the WB had issued its statement.

"So they’re (WB) now working on what kind of facility they would be making available to the (Asean) secretariat," Favila said.

He said the secretariat is expected to present the proposal during the Asean+3 meeting at the sideline of the Asia-Europe Meeting in Beijing on Oct. 24 and 25.

Once it is approved in principle, continued consultations along with the details of the implementing mechanisms would be discussed in a follow up meeting to be held in Manila on November 12.

This then will be presented to the heads of state meeting in Bangkok.

Favila said there was no one to blame for the confusion caused by the President’s erroneous announcement.

He added that Teves should also not be blamed as "all the discussions started as exploratory and preliminary in character."

Asked if the President was disappointed with the confusion that resulted from her announcement, he said: "No. To the President what is important is that the Asean initiative is being supported by World Bank."

"As to how it will be implemented, in what form, she does realize that it’s up to the Asean secretariat to work on it and present it to leaders," he added.

The ADB said Asia was in no imminent threat from the crisis, although growth in the world’s fastest-growing region would slow.

"The risks of another financial crisis in Asia are limited," said ADB managing director general Rajat Nag. "The fundamentals seem strong but we cannot take our eyes off the ball."

Governments around the world have pledged around $3.2 trillion in a variety of schemes to combat the worst global financial crisis in decades, which has toppled financial institutions in the United States and several other countries.