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BSP approves P540B in another Philippine gov't loan application

The Bangko Sentral ng Pilipinas has granted another loan request from the Philippine government -- third application in 2020 -- for budgetary support amid fiscal deficit arising from the COVID-19 pandemic.

During the virtual Kapihan sa Manila Bay forum on Wednesday, BSP Governor Benjamin Diokno announced that the central bank’s Monetary Board in late December 2020 approved the government’s request of P540 billion.

“We just approved it last December 28. In the last week of the year, we just OK’d. It’s a done deal,” Diokno said.

BSP's latest loan grant to the national government came after the first P540-billion loan approved in October 2020. 

In March, the BSP lent P300 billion to the government through the form of securities in support of efforts against COVID-19. 

Diokno said the government shall pay first its latest loan before it can make another request.

Apart from lending money to augment the government’s budget, the central bank responded to the pandemic through monetary policy easing measures, he added.

As of December last year, some P1.9 trillion has been released to the country’s financial system as a result of the BSP’s monetary easing measures. 

The central bank has so far reduced policy rates by 200 basis points this year: by 25 basis points in February; 50 basis points each in March, April, and June; and another by 25 basis points in November. —LBG, GMA News