BSP says no need for additional bridge financing for government

The Philippines no longer needs additional bridge financing given the current developments in the efforts against the COVID-19 pandemic and the unused provision under the Bayanihan to Recover as One Act, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

Bridge financing refers to financing options used by entities to solidify their short-term positions, until long-term options can be established.

According to BSP Governor Benjamin Diokno, there was an additional provision for bridge financing authorized by Congress under Bayanihan 2, but this was not availed by the Department of Finance (DOF). Bayanihan 2 expired on June 30. 

“The way I see it, now that we have turned the corner, I’m positive about this, the number of cases has been cut by half, we’re now opening the economy,” he told reporters in a virtual briefing.

The country on Thursday recorded 7,835 new confirmed cases of COVID-19, bringing the country’s active cases to 84,850. The total caseload stands at 2,698,232 which includes 2,573,161 recoveries and 40,221 deaths.

“Maybe there’s no more need for the P540-billion bridge financing for the DOF, so I don’t see any need for the additional bridge financing other than the P540 (billion) which is currently being made available to the DOF,” Diokno said.

Diokno last year said the BSP was ready to use all the tools necessary to soften the potential economic slowdown brought about by the pandemic.

The BSP has already loaned out P540 billion to the Philippine government, mainly to be used for budgetary support as the country faces a fiscal deficit due to the pandemic.

It earlier approved two loans worth P540 billion each to the national government in December 2020 and another in October last year.

The central bank also slashed key policy rates by 200 basis points in 2020 -- 25 basis points in February; 50 basis points each in March, April, and June; and another 25 basis points in November.

It also reduced the reserve requirement for all universal and commercial banks by 200 basis points in March 2020, and by 100 basis points for thrift, rural, and cooperative banks in July last year. — VBL, GMA News