For the period April to June 2022, the Monetary Board (MB) approved a total of US$3.54 billion of public sector foreign borrowings. These are 26 percent higher than the US$2.80 billion approved in the same period in 2021 and 26 percent lower than the loans approved in the first quarter 2022, amounting to US$4.80 billion. These are borrowings of the Republic of the Philippines consisting of one (1) JPY denominated bond issuance equivalent to about US$513.41 million, three (3) project loans aggregating to US$2.16 billion, and three (3) program loans aggregating to US$869.72 million.
These borrowings will fund the National Government’s (NG) general financing requirements (US$513.41 million), COVID-19 pandemic response and recovery (i.e., vaccine procurement and continuing requirements in light of the pandemic), among others (US$869.72 million), bridge projects (US$405.99 million), and a railway project (US$1.75 billion).
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, prior approval of the Bangko Sentral ng Pilipinas (BSP), through its MB, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines. Similarly, Letter of Instructions No. 158 dated 21 January 1974 also requires all foreign borrowing proposals by the NG, government agencies and government financial institutions to be submitted for approval-in-principle by the MB before commencement of actual negotiations. The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability.***