Fewer BSP-approved state loans sought as COVID-19 spending eases
MANILA -The Monetary Board (MB) gave the green light to a total of $2.73 billion in government foreign borrowings in the second quarter of 2023, which were all for supporting big-ticket railway projects.
According to the Bangko Sentral ng Pilipinas (BSP), MB-approved loans were 23 percent lower compared with the $3.54 billion that was approved in the same quarter of 2022.
In the second quarter last year, government borrowings still included hundreds of billions intended to support COVID-19 response efforts.
The BSP said that, this year, there were three project loans from the Japan International Cooperation Agency (Jica), all intended to fund various railway projects of the national government.
The Constitution requires the prior approval by the highest policy-making body of the 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.
Before actual negotiations can begin, proposals for foreign borrowings must be submitted to the MB for approval-in-principle.
Last February, the Philippine government represented by Finance Secretary Benjamin Diokno formally signed with representatives of the Japanese government additional loans worth a total of 377 billion yen or about P157 billion, for two sections of the ongoing North-South Commuter Railway (NSCR) project.
Manila and Tokyo signed a 270-billion-yen loan from the Jica, which is a second-tranche funding for the NSCR portions that span Malolos in Bulacan to Clark in Pampanga as well as Solis (Tondo) in Manila to Calamba City in Laguna.
The Malolos-Clark segment—one of three parts of the 163-kilometer NSCR, Solis-Calamba being another—was earlier funded through a $2.95-billion facility that the Asian Development Bank (ADB) board approved in May 2019.
The second phase of the Malolos-Clark Railway was also touted as a flagship project under the Duterte administration’s “Build, Build, Build” program.
The ADB said the Malolos-Clark Railway represented the Japan-led multilateral lender’s single-biggest project financing not only in the Philippines but in Asia as well.