The Bangko Sentral ng Pilipinas (BSP) said it has processed some P42.8 billion worth of local government unit (LGU) loans in the last half of 2020.
All LGUs must send requests for Monetary Board opinion before they could transact their planned domestic borrowings.
For the second semester of 2020, the BSP said it has received and reviewed 160 LGU requests for Monetary Board opinion. This was more than 93 requests or up by 72 percent from what was processed in the first half of 2020.
The BSP noted that of the total number of LGU requests, 140 requests or 87.5 percent received a Monetary Board opinion. The 140 requests was equivalent to P38.2 billion proposed loans.
“The processing of the remaining 20 requests were deferred due to incomplete documents or information submitted,” said the BSP.
The BSP said the requests for Monetary Board opinion came from 17 provinces with total proposed loan of P18.9 billion, and from 21 cities with loans of P9.2 billion.
Requests also came from 120 municipalities that proposed to take out a combined P14.6 billion loans.
Among the 17 Philippine regions, the largest number of LGU requests that were rendered a Monetary Board opinion came from Central Luzon (Region III) at 10.7 percent, with loan purposes that are mostly intended for infrastructure projects and acquisition of heavy equipment, said the BSP.
“There were also some proposed loans that were intended to fund measures to address the COVID-19 pandemic, such as for the acquisition of health service vehicles, construction of isolation/quarantine facilities, procurement of personal protective equipment, hospital equipment, medicines, reagents and testing kits, as well as provision of food assistance and relief goods,” said the BSP.
The CALABARZON region have the largest of proposed loans with P10.50 billion in the second half of 2020. Central Luzon proposed P4.93 billion loans while the National Capital Region is planning to borrow P3.89 billion.
It is in Central Luzon that BSP processed P4.2 billion worth of loan proposals from two barangays in Pampanga and Bataan for the acquisition of service vehicles and ambulance vehicles.
The BSP, in a statement, said that in its “continued commitment to transparency and good governance” it has released information on the issuances of Monetary Board opinion to LGUs on their proposed domestic borrowings on a semestral basis. “This set of information includes the amount and intended purpose of the proposed loans by various LGUs as well as the dates of the Monetary Board opinion issuances,” it said.
Under Section 123 of Republic Act (RA) No. 7653, otherwise known as the New Central Bank Act of 1993, as amended by RA No. 11211 in 2019, all LGUs must seek Monetary Board opinion for all proposed borrowings.
The provision in the BSP Charter “requires the government, its political subdivisions or instrumentalities, to request the Monetary Board to render its opinion on the monetary and external sector implications of their proposed loans prior to undertaking any credit operation.”