The Bangko Sentral’s policy-making Monetary Board has approved a $2.38-billion foreign borrowings of the national government in the first quarter of the year, lower by $1.04 billion (or by 30 percent) from the first quarter 2019 approvals of $3.42 billion.
These public sector borrowings consist of:
(a) one bond issuance in Euro amounting to EUR1.2 billion;
(b) four project loans totalling to $493 million; and
(c) two program loans totalling to $800 million.
These foreign borrowings will fund the NG’s:
(a) general financing requirements;
(b) projects to support infrastructure development and transport connectivity, and the implementation of Philippine Competition Act;
(c) programs to develop youth employment opportunities and resilience to natural disasters.
Of the total approved borrowings, about 9.23 percent or $219.8 million would fund an infrastructure flagship project under the “Build, Build, Build” program, particularly the undertakings of the Project Management Consultancy of the Philippine National Railways South Long Haul Project.
Under Section 20, Article VII of the 1987 Constitution, prior approval of the BSP, through its MB, is required for all foreign loans to be contracted or guaranteed by the NG.
Similarly, Letter of Instructions 158 dated Jan. 21, 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 ensure external debt sustainability.