Bangko Sentral ng Pilipinas (BSP). INQUIRER FILE PHOTO / GRIG C. MONTEGRANDE
MANILA, Philippines – The central bank has approved more applications of the various government units to take on more debt in the first quarter of this year to help them finance programs and projects used to mitigate the effects of the coronavirus pandemic, the agency said.
In a statement, the Bangko Sentral ng Pilipinas said its policy-making Monetary Board approved public sector foreign borrowings totaling $2.84 billion for the January through March 2021 period.
These comprised six project loans totaling $1.44 billion, a program loan of $600 million, and two bonds worth $798 million.
These combined public sector foreign borrowings were 19.36 percent higher than the $2.38 billion recorded during the same period last year.
According to the central bank, these foreign borrowings will fund the national government’s COVID-19 pandemic response programs, mainly for vaccine procurement and distribution ($900 million); refinancing of existing obligations and general financing requirements ($798 million); disaster resilience ($600 million); social protection ($300 million); public transport improvement ($138 million); and maritime safety ($105 million).
Under the 1987 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, additional presidential orders also require all foreign borrowing proposals by the national, government agencies and government financial institutions to be submitted for approval-in-principle by the Monetary Board before the commencement of actual negotiations.
“The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels to assure external debt sustainability,” the agency said.
Last year, the central bank also gave the green light to more foreign loan applications of the various government units for pandemic-related expenses.
In 2020, the BSP approved public sector foreign borrowings totaling $17.7 billion last year, consisting of three bond issuances worth $6.6 billion; 15 project loans worth $3.7 billion; and 16 program loans with a total value of $7.5 billion.
Borrowings approved in 2020 were 82.5 percent higher compared to the 2019 figure of $9.7 billion due to higher bond — an 88.6-percent increase from $3.5 billion in 2019 to $6.6 billion in 2020 — and the surge in program loans representing a 435.7-percent increase from $1.4 billion in 2019 to $7.5 billion in 2020.
All told, foreign loans secured by the Philippines have $15.49 billion or P752 billion since the start of the pandemic until early April, according to data from the Department of Finance.