Foreign borrowing approvals hit $14.49B

THE Monetary Board (MB) approved $3.32 billion in public sector foreign borrowings in the fourth quarter of last year, the Bangko Sentral ng Pilipinas (BSP) reported on Monday, bringing total approvals for 2023 to $14.49 billion.

Combined, the seven public sector medium-to-long-term loans greenlit in OctoberDecember were 65.80 percent more than the $2.0 billion approved a year earlier.

The full-year total, meanwhile, was 40.36, up from 2022’s $10.32 billion, and comprised two bond issuances, 12 project loans and 10 program loans, the BSP said.

Program loans surged to $4.82 billion from $870 million, and project loans picked up to $5.67 billion from $4.68 billion. Bond issuances, however, slipped to $4.0 billion from $4.77 billion a year earlier.

The borrowings were to be used for government infrastructure projects ($4.07 billion or 28.10 percent; general financing requirements ($4.00 billion or 27.61 percent); economic, environmental, and climate projects and programs ($ 3.07 billion or 21.16 percent); pandemic responses ($2.27 billion or 15.64 percent); agriculture projects ($880 million or 6.05 percent); and education projects ($210 million).

Under the 1987 Constitution,

foreign loans to be contracted or guaranteed by the government have to be approved by the Monetary Board.

Letter of Instruction 158, issued during the martial law era, also states that foreign borrowing plans of the government, its agencies, and state-owned firms should be submitted to the Monetary Board for preliminary approval before negotiations start.

“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 in a statement.