The Bangko Sentral ng Pilipinas (BSP) has approved $8.518-billion worth of public sector foreign borrowings in the first nine months of the year, majority of which was incurred by the previous Duterte administration.

The January-September borrowing though was lower by 17.3 percent compared with the same period in 2021 of $10.30 billion.

Of total loan, the Duterte administration took up the bulk of $8.3 billion of which $4.8 billion were incurred in the first three months of 2022. This was 69 percent higher than the $2.83 billion borrowings in the same period in 2021.

During the previous quarter, April to June, still under the Duterte government, the BSP authorized the NG to borrow $3.54 billion, up 26 percent from $2.80 billion same period in 2021.

Meantime, the new administration of President Ferdinand E. Marcos just contributed $178 million loan for the third quarter or 96 percent lower than than the $4.66 billion loan by Duterte in the same July-September period last year.

The BSP’s policy-making arm, the Monetary Board, approved the lone borrowing project in the third quarter to fund the National Government’s (NG) multisectoral nutrition project. This borrowing was conducted under the new administration.

Public sector borrowings are comprised of both project loans and program loans. It also includes sovereign bond sale for NG general financing requirements such as Covid-19 pandemic response and infrastructure-related developments.

To make sure foreign debt level continue to be manageable, the BSP is mandated to review and approve all public sector or government foreign borrowings under Section 20, Article VII of the 1987 Philippine Constitution.

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

In 2021, the Monetary Board approved $13 billion worth of public sector foreign borrowings. This was lower by 25.9 percent compared to $17.7 billion in 2020 due to lower bond issuances.

As of end-June this year, the country’s outstanding external debt totalled $107.69 billion, up by 6.4 percent from same period last year of $101.19 billion.

The external debt refers to all types of borrowings by Philippine residents from non-residents based on the residency criterion for international statistics.

On a quarter-on-quarter basis, outstanding external debt decreased by 1.9 percent or by $2.1 billion from $109.8 billion as of end-March this year.

The current debt stock is 26.8 percent of gross domestic product (GDP). This was a lower GDP ratio compared to end-March’s 27.5 percent.

Japan continue to be the country’s major creditor with $13.8 billion of the external debt, followed by the United Kingdom with $3.6 billion, and The Netherlands with $2.8 billion.

Loans from official sources or multilateral and bilateral creditors accounted for 37.4 percent of total external debt stock, while 34.9 percent were borrowings in the form of bonds and notes. Foreign banks and other financial institutions comprised 20.9 percent of the total external debt while the rest at 6.9 percent were owed to other creditors.