Monetary Board OKs $3.919B nat’l gov’t loans in Q3

The Bangko Sentral ng Pilipinas’ (BSP) policy-setting Monetary Board (MB) approved a $3.919-billion worth of foreign loans secured by the national government during the third quarter of 2020.

Under Section 20, Article VII of the 1987 Constitution, prior approval of the BSP, through its MB, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.

Similarly, Letter of Instructions No. 158 dated January 21, 1974 also requires all foreign borrowing proposals by the national government, government agencies, and government financial institutions to be submitted for approval-in-principle by the MB before commencement of actual negotiations.

With this, the BSP said it promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability.

The $3.919-billion foreign borrowings by the national government in the July to September period are higher by $1.265 billion or 47.69% from $2.654 billion in the same period in 2019.

The foreign loans consist of five project loans amounting to $1.979 billion and six program loans amounting to $1.940 billion.

The foreign borrowings will fund the national government’s infrastructure development ($1.458 billion); response to the COVID-19 pandemic ($1.247 billion); agrarian reform and agriculture development ($770.000 million); (financial inclusion programs ($417.420 million) and local governance reforms ($26.530 million). — RSJ, GMA News