The Monetary Board (MB) gave the green light to a total of $4.8 billion of public sector foreign borrowings in the first quarter of 2022, a surge of 69 percent from the $2.84 billion approved in the same period in 2021.
The 1987 Philippine Constitution requires that prior approval by the highest policy making body of the Bangko Sentral ng Pilipinas (BSP) for all foreign loans that the public sector—the national government itself as well as its agencies and financial institutions—will take or guarantee.
Also, before actual negotiations can begin, proposals for foreign borrowings must be submitted to the Monetary Board for approval-in-principle.
According to the BSP, the borrowings approved from January to March consist of $2.25 billion in bond issuance and $2.55 billion covering three project loans.
Proceeds from the bond issuance were intended for the national government’s general budget financing needs.
Meanwhile the projects are related to transportation $2.08 billion); COVID-19 pandemic response $300 million; and infrastructure $175.10 million.
In 2021, government borrowings were made mostly through the issuance of bonds amounting to $6.2 billion, but also through loans taken for programs ($3.9 billion) as well as specific projects ($3.1 billion).
In 2020, foreign borrowings ballooned by 83 percent from the prepandemic level of $9.7 billion in 2019 as the government scrambled to address the initial brunt of COVID-19 and shore up the economy crippled by the pandemic.