As local governments units (LGUs) added borrowings for their priority programs and projects like infrastructure, their outstanding loans rose to a new high of P148.3 billion as of the first quarter of 2022, the latest Department of Finance (DOF) data showed.
According to the DOF’s Bureau of Local Government Finance (BLGF), LGUs current loans amounted to P147.7 billion, while there were P560.5 million worth of past due loans as of end-March.
LGUs’ aggregate outstanding bank loans at the end of the first quarter further increased from P136.6 billion in end-2021, P112.9 billion in 2020, and P107.8 billion in 2019—its first time to breach the P100-billion level, BLGF data showed.
The BLGF said that as of March 2022, it approved a cumulative P354.6 billion in LGU loans from government financial institutions (GFIs) as well as private lenders.
GFIs like the Land Bank of the Philippines, Development Bank of the Philippines and the Municipal Development Fund Office extended a combined P335.7 billion in loans, while a handful of private banks accounted for the remaining P18.9 billion.
Out of the total loans that the BLGF had approved, LGUs so far availed of P205.9 billion worth— P190.6 billion from GFIs, plus P15.2 billion from private creditors—as of the end of March.
As the Inquirer earlier reported, 113 LGUs borrowed a total of P20.8 billion from state-run lenders as of end-July to bankroll their mostly infrastructure projects.
The BLGF issues certificates of net debt service ceiling and borrowing capacity to LGUs as proof that they can repay their loans from GFIs.
The LGUs from January to July—four provinces, 23 cities, 81 municipalities and five barangays—were found to be capable of settling their obligations, as they had a total borrowing capacity of P48.6 billion.