BSP Approves US$3.21 Billion Public Borrowings

The Monetary Board approved US$3.21 billion in medium- to long-term foreign borrowings for the public sector during the fourth quarter of 2024, according to the Bangko Sentral ng Pilipinas (BSP).

This amount reflects a 3.35 percent decrease, or US$110 million, compared to the US$3.32 billion in foreign borrowings approved during the same period in 2023.

For the full year 2024, 21 public sector foreign borrowing transactions were approved, totaling US$13.68 billion. These include two bond issuances worth US$4.50 billion, 11 project loans amounting to US$5.32 billion, and eight program loans valued at US$3.86 billion.

The 2024 total is 5.56 percent lower than the US$14.49 billion approved in 2023, largely due to a decline in program loans, which dropped from US$4.82 billion in 2023 to US$3.86 billion in 2024, and project loans, which fell from US$5.67 billion to US$5.32 billion. However, bond issuances increased from US$4.00 billion in 2023 to US$4.50 billion in 2024.

The approved borrowings will fund the National Government’s priorities, including:

• General financing needs: US$4.50 billion (32.89 percent).
• Infrastructure projects, including transportation: US$4.35 billion (31.79 percent).
• Economic recovery, policy reforms, environmental protection, and climate resilience programs: US$2.98 billion (21.79 percent).
• Education and healthcare initiatives: US$1.36 billion (9.94 percent).
• Agrarian reform and maritime safety projects: US$490 million (3.59 percent).

Constitutional and Regulatory Context

Under Section 20, Article VII of the 1987 Constitution, all foreign loans contracted or guaranteed by the Republic of the Philippines must receive prior approval from the BSP through its Monetary Board.

Additionally, Letter of Instructions No. 158, issued on January 21, 1974, mandates that all foreign borrowing proposals by the National Government, government agencies, and government financial institutions must be submitted for approval-in-principle by the Monetary Board before negotiations begin.

The BSP emphasized its role in ensuring the judicious use of resources while maintaining external debt sustainability. By keeping external debt levels manageable, the central bank aims to safeguard the country’s financial stability.

This approval highlights the government’s commitment to balancing fiscal needs with prudent debt management, focusing on key development projects that promote economic growth and resilience.