The national government (NG) already borrowed 14 percent of its financing program this year equivalent to $5.56 billion, based on data from the monetary board of the Bangko Sentral ng Pilipinas (BSP).
“For the period January to March 2023, the Monetary Board (MB) approved a total of $5.56 billion of public sector foreign borrowings,” the BSP said in a report published at its website.
According to the BSP, this was 16 percent higher than the U$4.80 billion approved in the same period last year andconsisted of one dollar-denominated bond issuance amounting to $3 billion, two project loans aggregating to $0.30 billion, and five program loans aggregating to $2.26 billion.
In context, the aggregate three-month public sector foreign borrowings already equal 14 percent of its planned borrowings this year totaling $40 billion.
These borrowings will fund the national government’s general budget financing and financing or refinancing of assets in line with the country’s Sustainable Finance Framework ($3 billion), COVID-19 pandemic response and recovery, among others ($2.26 billion), infrastructure ($0.20 billion), and education $0.10 billion projects.
Under Section 20, Article VII of the 1987 Constitution of the RP, prior approval of the BSP, through its MB, is required for all foreign loans to be contracted or guaranteed by the government.
Similarly, Letter of Instructions No. 158 dated 21 January 1974 requires all foreign borrowing proposals by the NG, government agencies and government financial institutions to be submitted for approval-in-principle by the MB before commencement of actual negotiations.
The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability.
