The government sector borrowed USD1.32 billion more in medium- to long-term (MLT) funds in the final three months of 2023, which was 66 percent more than that borrowed a year earlier, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.
The funds financed the continuing drive to build up the country’s public infrastructures as telecommunications and transport sector. All seven public sector loans aggregated USD3.32 billion that exceeded the year-ago loans of only USD2 billion approved by the policy-making monetary board.
This brought the public sector foreign borrowings in 2023 to USD14.49 billion, consisting of 24 MLT foreign borrowings: (a) two bond sales worth USD4 billion); (b) 12 project loans of another USD5.67 billion); and 10 program loans worth USD4.82 billion.
These were 40.36 percent higher compared to the 2022 approvals of USD10.32 billion due to increase in: (a) program loans (from USD0.87 billion in 2022 to USD4.82 billion in 2023); and (b) project loans (from USD4.68 billion to USD5.67 billion in 2023) which more than offset the decrease in bond issuance (from USD4.77 billion in 2022 to USD4 billion in 2023.
According to the BSP, these 2023 borrowings will fund the national government’s (NG): (a) infrastructure projects, including transportation (USD4.07 billion or 28.10 percent); (b) general financing requirements (USD4 billion or 27.61 percent); (c) economic recovery and development, environmental protection and climate resilience projects and programs (USD3.07 billion or 21.16 percent); (d) COVID-19 pandemic response projects and programs (USD2.27 billion or 15.64 percent); (e) agriculture projects (USD0.88 billion or 6.05 percent); and (f) education projects (USD0.21 billion or 1.45 percent)
Under the 1987 Constitution, prior BSP approval, through its MB, is required for all foreign loans contracted or guaranteed by the sovereign.
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.
Public sector debt as percent of local output, measured as the gross domestic product (GDP), equaled 60.9 percent in 2022. The Philippine Statistics Authority has yet to issue updated debt numbers.
