The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved the National Government’s $3.919 billion foreign borrowings in July to September, up 47.69 percent from same period last year of $2.654 billion.

The approved foreign borrowings in the third quarter include five project loans amounting to $1.979 billion and six program loans worth $1.940 billion.

These loans will fund the following: $1.458 billion for infrastructure development; $1.247 billion to finance COVID-19 pandemic response; $770 million for agrarian reform and agriculture development; $417.42 million for financial inclusion programs; and $26.53 million alloted for local governance reforms.

Under the law, the government and all of the public sector has to go through the Monetary Board which is the BSP’s policy-making body, for a review and approval-in-principle of all foreign borrowings.

“The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability,” it said.

Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines requires that all foreign loans to be contracted or guaranteed by the National Government has to have prior approval from the Monetary Board. There are also other rules that state this such as Letter of Instructions No. 158 issued in January 1974 that said that “all foreign borrowing proposals by the National Government, government agencies and government financial institutions (will be) submitted for approval-in-principle by the Monetary Board before commencement of actual negotiations.”