THE Bangko Sentral ng Pilipinas (BSP) reported on Tuesday that it has approved more dollar-denominated loans by the public sector in the third quarter of the year, as the country borrows more to finance its programs.
In a statement, the BSP said the Monetary Board approved a total of $4.66-billion public sector foreign borrowings in the third quarter of 2021. This is 18.9 percent higher than the $3.92 billion approvals in the same period last year.
Broken down, the public sector foreign borrowings consist of one bond issuance amounting to $3 billion, three project loans amounting to $855.94 million, and two program loans amounting to $800 million.
According to the BSP, these borrowings are intended to fund the Republic of the Philippines’s general financing requirements at $3 billion, reform programs on youth employment and the financial sector at $800 million, and disaster resilience at $300 million.
The remaining borrowings will fund assistance to the agriculture sector at $280 million and emergency response at $275.94 million.
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, prior approval of the BSP, through
the Monetary Board, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Similarly, Letter of Instructions No. 158 dated January 21, 1974, also requires all foreign borrowing proposals by the national government, government agencies and government financial institutions to be submitted for approval-in-principle by the Monetary Board before commencement of actual negotiations.
The outstanding debt of the national government has hit another record high of P11.64 trillion as of end-August this year.
From only P9.62 trillion as of August 2020, the outstanding debt has already gone up by 21.1 percent.