Monetary Board okays US$5.56 billion foreign borrowings of the public sector in Q1 2023

For the period January to March 2023, the Monetary Board (MB) approved a total of US$5.56 billion of public sector foreign borrowings.

These are 16 percent higher than the US$4.80 billion approved in the same period in 2022.

These consist of one (1) US$-denominated bond issuance amounting to US$3.0 billion, two (2) project loans aggregating to US$0.30 billion, and five (5) program loans aggregating to US$2.26 billion.

These borrowings will fund the National Government’s (NG) general budget financing and financing/refinancing of assets in line with the Republic of the Philippines’ (RP’s) Sustainable Finance Framework (US$3.0 billion), COVID-19 pandemic response and recovery, among others (US$2.26 billion), infrastructure (US$0.20 billion), and education (US$0.10 billion) projects.

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 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.