The Monetary Board (MB) approved a total of US$2.73 billion of public sector foreign borrowings in the second quarter of 2023 which is US$0.81 billion (or 23 percent) lower than the US$3.54 billion approval in the same period in 2022.
These are all borrowings by the Republic of the Philippines (RP) consisting of three (3) project loans from the Japan International Cooperation Agency. These borrowings will fund various railway projects of the National Government (NG).
Under Section 20, Article VII of the 1987 Constitution of the RP, prior approval of the Bangko Sentral ng Pilipinas (BSP), through its MB, is required for all foreign loans to be contracted or guaranteed by the RP.
Similarly, Letter of Instructions No. 158 dated 21 January 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.
