MB greenlights USD2.7B in gov’t foreign borrowings

The Monetary Board (MB)  has approved USD 2.7 billion of public sector foreign borrowings in the third quarter this year, which would fund the government’s programs on economic recovery and climate resilience, among others. 

The amount is significantly higher compared with the USD 178.1 million worth of foreign borrowings by the public sector that the Bangko Sentral ng Pilipinas (BSP) greenlit in the third quarter last year.

Quarter on quarter, it was lower by 1.09% than the USD 2.73 billion approved in the second quarter of 2023.

Broken down, the BSP approved four project loans totaling USD 1.95 billion and one program loan worth USD 750 million.

“These borrowings will fund the National Government’s (NG) program on economic recovery, environmental protection and climate resilience, as well as projects for the transport and agricultural sectors,” the BSP said in a statement late on Friday.

The 1987 Constitution requires the Monetary Board to approve any foreign loan agreement that is entered into by the National Government.

“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 added.

Latest data from the central bank showed the country’s outstanding external debt increased by 9.5% to USD 117.918 billion at end-June from USD 107.692 billion a year ago.

However, it dipped by 0.8% from the record USD 118.812 billion seen at the end of March.

This is equivalent to 28.5% of the country’s gross domestic product, easing from the 29% ratio as of end-March.

The government plans to borrow PHP 2.207 trillion this year, of which 75% will be sourced locally. Broken down, PHP 1.654 trillion will be sourced domestically and PHP 553.5 billion will come from overseas. — Keisha B. Ta-asan