The national government took out fewer foreign loans in the first quarter of 2020 to meet its financing needs, according to the central bank.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) is in charge of screening and approving all borrowings of state institutions.
In a statement, the BSP said the Monetary Board approved an aggregate of $2.38 billion foreign borrowings by the government in the first three months of 2020.
This was lower by $1.04 billion — or 30 percent — from the $3.42 billion borrowed in the first quarter of 2019.
The public sector borrowings consisted of one bond issuance worth 1.2 billion euros; four project loans totalling $493 million; and two program loans totalling $800 million.
“These foreign borrowings will fund the national government’s general financing requirements,” said the BSP statement.
It said the money would be spent on “projects to support infrastructure development and transport connectivity, and the implementation of Philippine Competition Act and programs to develop youth employment opportunities and resilience to natural disasters.”
Of the total approved borrowings, about 9.23 percent, or $219.8 million, will fund a project related to the Duterte administration’s “Build, Build, Build” program, particularly the management consultancy for the Philippine National Railways’ South Long Haul Project.
Under the Constitution, prior approval of the central bank through its Monetary Board is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Similarly, a 1974 presidential letter of instruction also requires all foreign borrowing proposals by the national government, state agencies and government financial institutions to be submitted for approval-in-principle by the Monetary Board before actual negotiations.
“The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to ensure external debt sustainability,” the central bank said.