THE Monetary Board (MB) approved a total of US$4.80 billion of public sector foreign borrowings in the first quarter of 2022, 69 percent higher than the US$2.84 billion approvals in the same period in 2021. These consist of: (a) one (1) bond issuance amounting to US$2.25 billion; and (b) three (3) project loans aggregating to US$2.55 billion.
These borrowings will fund: (a) the National Government’s general budget financing requirements (US$2.25 billion); (b) transportation (US$2.08 billion); (c) COVID-19 pandemic response (US$300 million); and (d) infrastructure (US$175.10 million).
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, 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 Republic of the Philippines. Similarly, Letter of Instructions No. 158 dated 21 January 1974 also 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 promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability.
