THE Monetary Board (MB) approved a 19.36-percent increase in public sector foreign borrowings for the first quarter of this year, according to the Bangko Sentral ng Pilipinas (BSP).
In a statement, the BSP said the MB approved public sector foreign borrowings to reach $2.84 billion in the January to March period this year, higher than the $2.38 billion last year.
These consist of six project loans amounting to $1.44 billion; one program loan amounting to $600 million; and, two bond issuances amounting to $798 million.
BSP said the bulk of the foreign borrowings will finance the national government’s Covid-19 pandemic response programs. Some $900 million will mainly be used for vaccine procurement and distribution.
The foreign borrowings will also refinance existing obligations and general financing requirements worth $798 million; disaster resilience, $600 million; social protection, $300 million; public transport improvement, $138 million; and, maritime safety, $105 million.
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, prior approval of the BSP, through the MB, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Further, Letter of Instruction 158 dated January 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 support external debt sustainability, the statement from the Central Bank said.