The central bank will lend the national government a fresh short-term loan of more than half a trillion pesos—the third such use by the Duterte administration of cash advances from the monetary regulator—to finance efforts against the coronavirus pandemic.
In an online press briefing, Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno said the latest debt package worth P540 billion was approved by the policymaking Monetary Board late last year and was expected to be drawn this month.
“The BSP stands ready to discuss the provision of advances to the national government under existing laws in line with whole-of-nation efforts to ease the adverse impact of the pandemic,” he said.
According to the BSP’s Office of General Counsel and Legal Services, the national government may apply for advances provided the ceiling under the central bank charter is observed at all times, subject to the agency’s evaluation and approval.
Section 89 of the BSP charter allows the national government to tap the equivalent of up to 20 percent of its average annual income for the last three preceding fiscal years. These loans must be repaid before the end of three months, extendible by another quarter, as allowed by the Monetary Board.
The pandemic stimulus law passed last year, dubbed “Bayanihan 2,” also allows the government to apply for a loan from the BSP equivalent to 10 percent of its average income for fiscal years 2017 to 2019, within two years after the law takes effect.
Based on a Sept. 1, 2020, certification submitted by the Bureau of the Treasury, the national government has an average annual income for the years 2017 to 2019 of P2.82 trillion, 20 percent of which amounts to P564 billion.