The central bank’s Monetary Board has approved $4.66 billion worth of public sector foreign borrowings in the third quarter, up 18.99 percent compared to $3.92 billion in the same period last year.
The Bangko Sentral ng Pilipinas (BSP) said the approved foreign borrowings include the following: bond issuance worth $3 billion; three project loans amounting to $855.94 million; and two program loans worth $800 million.
The BSP also said that these borrowings will fund the $3 billion general financing requirements of the government and the $800 million reform programs on youth employment and financial sector.
Another $300 million will go to disaster resilience while $280 million will be used as agriculture sector assistance. The BSP said about $276 million will be used as emergency response funding.
Under Section 20, Article VII of the 1987 Constitution, all foreign loans to be contracted or guaranteed by the government should first seek BSP approval. Based on other rules, the BSP would have to give approval-in-principle also to all foreign borrowing proposals by the National Government (NG), government agencies and government financial institutions.
BSP Governor Benjamin E. Diokno said earlier that the Philippines’ debt repayment profile continue to be on the healthy side and have some headroom to increase foreign borrowings.
He said a large part of the country’s external debt has medium-and-long term maturity profile, which supports a manageable debt repayment schedule and that bulk of foreign borrowings have fixed interest rates which make these loans not susceptible to global interest rates volatilities or foreign exchange fluctuations.
As of end-June this year, the country’s external debt increased by 15.66 percent year-on-year to $101.2 billion. This was also an increase of $13.7 billion over the same period in 2020 of $87.5 billion.
As of end-June, public sector external debt was at $59.9 billion from $56.8 billion in the previous quarter, of which $54.3 billion were NG borrowings while the remaining $5.7 billion were loans of other government-owned and controlled corporations and government financial institutions such as the BSP.