The Bangko Sentral ng Pilipinas (BSP) gave the green light to P22.4 billion worth of loans in the first half of 2019 that local government units were borrowing for various projects.
It was part of the P32.2 billion in loans that LGUs applied for with the BSP.
Of these approved loans, the biggest was the P2.7-billion by the city of Imus, Cavite province which it planned to spend on a new government center. A P2-billion loan by the Ilocos Norte provincial government was also approved for the expansion of the provincial capitol. Negros Occidental’s P1.7-billion loan was approved for the construction of the Masskara Coliseum.
The BSP said it released the list of the loans, approved by the Monetary Board (MB), “as part of its commitment to transparency.”
Sets of data released by the BSP highlighted the amount and intended purpose of the LGU loans on a semestral basis and the numbers and dates of MB issuances related to these.
To date, the tables uploaded on the BSP website cover MB issuances from the second semester of 2018 to the first semester of 2019. Subsequent releases will be made at the end of the quarter this year.
For the first semester of 2019, the BSP received 154 requests for MB opinions on LGU loans. At least 115 opinions on 75 percent of the loan applications were rendered. Processing of the remaining 39 requests had been deferred because of incomplete documents and information.
Majority of LGU loans that were covered by MB opinions came from Western Visayas, 13 percent and Eastern Visayas, 11.3 percent. Most of the loans were for infrastructure and land acquisition.
The New Central Bank Act of 1993 required MB opinion on loans being sought by government entities, including LGUs.
This provision of the law stemmed from the BSP’s role as government advisor on official credit operations. It allows the BSP to monitor trends in public sector debts and assess their impact on the monetary sector and external payments position of the economy.