BSP approves $8.5 billion in government loans in 9 months – Manila Bulletin

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

January-September borrowing, however, was 17.3% lower than the same period in 2021 by $10.30 billion.

Of total lending, the Duterte administration absorbed the bulk of $8.3 billion, of which $4.8 billion was committed in the first three months of 2022. That was 69% more than borrowings of $2.83 billion over the same period in 2021.

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

Meanwhile, the new administration of President Ferdinand E. Marcos just contributed a $178 million loan for the third quarter, 96% less than the $4.66 billion loan Duterte made in the third quarter. same period July-September of last year.

PASB’s decision-making body, the Monetary Board, approved the only borrowing project in the third quarter to finance the national government’s (NG) multi-sector nutrition project. This loan was made under the new administration.

Public sector borrowing includes both project and program loans. It also includes the sale of sovereign bonds for general NG funding needs such as the response to the Covid-19 pandemic and infrastructure-related developments.

To ensure that the level of foreign debt remains manageable, the BSP is responsible for reviewing and approving all public sector or government foreign borrowing under Section 20, Article VII of the Philippine Constitution of 1987 .

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

In 2021, the Monetary Board approved $13 billion in public sector foreign borrowing. This figure was 25.9% lower from $17.7 billion in 2020 due to lower bond issuance.

At the end of June this year, the country’s outstanding external debt stood at $107.69 billion, up 6.4% from the same period last year of $101.19 billion. of dollars.

External debt refers to all types of borrowings by Philippine residents from non-residents based on residency criteria for international statistics.

On a quarterly basis, the stock of external debt fell by 1.9 percent or $2.1 billion, from $109.8 billion at the end of March this year.

The current debt stock is 26.8% of gross domestic product (GDP). This is a lower GDP ratio compared to 27.5% at the end of March.

Japan continues to be the country’s largest creditor with $13.8 billion in foreign debt, followed by the United Kingdom with $3.6 billion and the Netherlands with $2.8 billion.

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

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