The Bangko Sentral ng Pilipinas (BSP) has approved a total $10.32-billion worth of public sector foreign borrowings in 2022, lower by 21.43 percent compared to $13.14 billion in 2021.

In the last quarter of 2022, the BSP’s policy-making arm, the Monetary Board, approved $2 billion public sector foreign borrowings, down by 32.95 percent from same period in 2021 of $2.98 billion. This was the bond issuance of the Republic of the Philippines to fund the National Government’s (NG) general financing requirement.

Last year, the BSP-reviewed and approved public sector borrowings include: three bond issuances worth $4.77 billion; seven project loans worth $4.68 billion; and three program loans worth $870 million.

The central bank noted that in 2022, there were lower bond issuances compared to $6.16 billion in 2021. Bond issuances were down by 22.50 percent last year.

Program loans also declined by 77.52 percent in 2022 from $3.88 billion in 2021, while project loans were up 50.96 percent from $3.10 billion in 2021.

The government’s 2022 borrowings will fund the NG expenditures for the following: general financing requirements amounting to $4.77 billion or 46.22 percent of the total; and transportation projects worth $3.63 billion or 35.20 percent of the total.

The loans will also go to Covid-19 pandemic response projects and programs worth $1.35 billion or 13.09 percent of the total, and other infrastructure development projects worth $570 million or 5.49 percent of the total.

To make sure foreign debt level will 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.”

As of end-September 2022, the country’s outstanding external debt increased by 1.87 percent or almost $2 billion billion to $107.91 billion from $105.93 billion same period in 2021.

The external debt level was still higher than the country’s depleted gross international reserves (GIR) of $96.1 billion as of end-2022.

Meanwhile, the ratio against gross domestic product (GDP) declined to 26.8 percent versus 27.3 percent same time in 2021.

The BSP said the “low” debt level to GDP ratio which is a solvency indicator, still indicates the country’s “sustained strong position to service foreign borrowings in the medium to long-term.”

“The ratio remains one of the lowest when compared to other ASEAN member countries,” said the BSP.