Monetary authorities approved more foreign borrowings by the national government in the last three months of 2020, raising the full-year tally to over $17 billion, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
In a statement, the central bank said its policymaking Monetary Board (MB) approved borrowings worth $17.7 billion last year, up 82.5 percent from 2019’s $9.7 billion.
In the fourth quarter alone, approved foreign borrowings amounted to $4.2 billion, 7.7 percent bigger than the $3.9 billion in July to September.
Last year’s borrowings consisted of three bond issuances worth $6.6 billion, 15 project loans worth $3.7 billion and 16 program loans worth $7.5 billion.
According to the BSP, the increase in approved borrowings was due to bond issuances growing by 88.6 percent year-on-year to $6.6 billion from $3.5 billion, and program loans surging by 435.7 percent to $7.5 billion from $1.4 billion in 2019.
“The increase in public-sector foreign borrowings in 2020 are, among others, to fund the government’s Covid-19 pandemic response programs and to support economic recovery,” it said.
The Bangko Sentral also said Monetary Board approval was required for all foreign loans to be contracted or guaranteed by the Philippine government, as mandated by the 1987 Constitution.
Similarly, Letter of Instructions 158, dated Jan. 21, 1974, also required all foreign-borrowing proposals from the national government, government agencies and state financial institutions to be submitted for MB approval before actual negotiations begin, it added.
“The BSP promotes the judicious use of the resources, and ensures that external debt requirements are at manageable levels to support external debt sustainability,” the central bank said.
Earlier, the Bureau of the Treasury reported that the government’s foreign debt slid by 0.3 percent to P2.94 trillion at end-November.
It attributed the lower foreign obligations to “the P10.74-billion net effect of currency adjustments, particularly [the] peso appreciation offsetting net foreign loan availments amounting to P2.55 billion.”
External financing posted inflows of P583.64 billion in January to November. For the period, project loan availments reached P32.93 billion ($0.68 billion) while program loans totaled P364.64 billion ($7.58 billion). Offshore bond issuances hit P186.06 billion ($3.87 billion).
Source: ManilaTimes
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