The Bangko Sentral ng Pilipinas’ (BSP) policy-setting Monetary Board (MB) approved $5.56 billion worth of public sector foreign borrowings in the first quarter of 2023.
In a statement on Saturday, the BSP said the amount was 16% higher than the $4.80 billion approved in the same period in 2022.
The foreign borrowings were composed of one US dollar-denominated bond issuance amounting to $3.0 billion, two project loans aggregating to $300 million, and five program loans totaling $2.26 billion.
“These borrowings will fund the National Government’s (NG) general budget financing and financing/refinancing of assets in line with the Republic of the Philippines’ (RP’s) Sustainable Finance Framework ($3.0 billion), COVID-19 pandemic response and recovery, among others ($2.26 billion), infrastructure ($200 million), and education (100 million) projects,” the central bank said.
Under Section 20, Article VII of the 1987 Constitution , prior approval of the Bangko Sentral ng Pilipinas (BSP), through its MB, is required for all foreign loans to be contracted or guaranteed by the RP.
Similarly, Letter of Instructions No. 158 dated January 21, 1974 requires all foreign borrowing proposals by the NG, government agencies and government financial institutions to be submitted for approval-in-principle by the MB before commencement of actual negotiations.
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.” — DVM, GMA Integrated News