Okayed foreign borrowings up 48% in Q3

THE country’s monetary authorities approved more foreign borrowings by the national government in the third quarter of 2020, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

In a statement, the central bank said its policymaking Monetary Board (MB) greenlighted an aggregate $3.91 billion in foreign borrowings in July to September.

The amount was a $ 1.26- billion or 47.69- percent increase from the $2.654 billion borrowed in the third quarter of 2019.

These borrowings consisted of five project loans worth $ 1.979 billion and six program loans amounting to $1.940 billion. The BSP did not specify them.

The borrowed funds will finance the government’s funding requirements for infrastructure development ($ 1.45 billion); response to the coronavirus disease 2019 pandemic ($ 1.24 billion); agrarian reform and agriculture development ($ 770 million); financial inclusion programs ($ 417.42 million); and local governance reforms ($ 26.53 million).

The Bangko Sentral said its prior approval through the Monetary Board 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 requires all foreign borrowing proposals by the national government, government agencies and state financial institutions to be submitted for approval in principle by the Monetary Board 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 eased by 0.2 percent to P2.90 trillion at end- August, which it attributed to the P37.36- billion net effect of the peso’s appreciation.

“Net availment of external loans added P27.07 billion, alongside the P4.64-billion effect of [the] appreciation on third-currency-denominated external loans,” it added.

The government’s foreign financing posted an inflow of P509.69 billion in January to August against a debt repayment of P117.04 billion.

Project loan availments in the first eight months reached P17.09 billion while program loans amounted to P306.54 billion. Offshore bond issuances reached P186.06 billion.