Photo courtesy of Bangko Sentral ng Pilipinas Facebook Page
The Monetary Board (MB) gave the green light to a total of $3.54 billion in new government foreign borrowing in the second quarter of 2022, part of which covers the continuing need to address the COVID-19 pandemic.
According to the Bangko Sentral ng Pilipinas (BSP), MB-approved loans were 26 percent lower than the $4.89 billion borrowing approved in the same quarter of 2021.
From April to June this year, the national government issued Japanese yen denominated bonds equivalent to $513.4 million. Proceeds were earmarked for general financing needs.
Also, the government availed of three project loans summing up to $2.16 billion in value, as well as three program loans with a combined amount of $869.72 million.
Items that will benefit from the funds include COVID-19 pandemic response and recovery—referring to vaccine procurement and continuing needs in light of the pandemic—as well as $406 million worth of bridge projects and a $1.75-billion railway project.
The 1987 Philippine Constitution requires prior approval by the BSP’s highest policy making body of all foreign loans that the public sector, referring to 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 are required to be submitted to the MB for approval.
“The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability,” the BSP said.
Earlier this month, the central bank said the country’s foreign liabilities again outweighed its stock of foreign assets at the end of March 2022, with the net external liability rising to $31.6 billion. This meant an increase from $27.6 billion foreign debt stock recorded at end-2021 and almost double the $16.2 billion level at the end of first quarter 2021.
At end-March 2022, total outstanding external financial assets were pegged at $238.4 billion, while total outstanding external financial liabilities totaled $269.9 billion.