The highest policy making body of the central bank approved over double the amount of foreign loans borrowed by the national government in the second quarter of this year to fund its programs against the new coronavirus disease (COVID-19) pandemic.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said its Monetary Board gave the green light to a total of $6.8 billion in new debt from overseas lenders during the April-June 2020 period—125 percent or $3.8-billion higher than the total loan approvals of $3 billion for the same timeframe last year.
These borrowings consist of one bond issuance aggregating to $2.35 billion; three project loans amounting to $341 million; and six program loans amounting to $4.15 billion.
These foreign borrowings will fund the government’s general financing requirements for 2020 worth $2.35 billion; programs in response to the pandemic worth $4.45 billion; and projects in infrastructure development of $41 million.
Under Section 20, Article VII of the 1987 Constitution, prior approval of the BSP, through its Monetary Board, it is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Similarly, Letter of Instructions No. 158 dated Jan. 21, 1974, also requires all foreign borrowing proposals by the national government, government agencies and government financial institutions to be submitted for approval-in-principle by the Monetary Board before commencement of actual negotiations.
To date, the Philippines’ war chest against COVID-19 has breached the P1-trillion level, data compiled by economists at Asian Development Bank showed. INQ