MB okays US$3-billion foreign loans of public sector in Q4 2021

The Monetary Board (MB) approved a total of about US$3.0 billion public sector foreign borrowings in the fourth quarter of 2021, 28.4 percent lower than the US$4.2 billion approvals in the same period in 2020. These consist of: (a) two (2) project loans amounting to US$0.5 billion; and (b) six (6) program loans amounting to about US$2.5 billion.

These borrowings will fund: (a) COVID-19 pandemic response and economic recovery measures (US$2.7 billion); and (b) disaster risk reduction (US$0.3 billion).

Meanwhile, public sector foreign borrowings approved in 2021 reached US$13.1 billion^a. These consist of: (a) four [4] bond issuances (US$6.2 billion); (b) 12 project loans (US$3.1 billion); and (c) nine [9] program loans (US$3.9 billion). Borrowings approved in 2021 were 25.9 percent^b lower compared to the 2020 figure of US$17.7 billion due to lower bond issuances (6.2 percent^b decrease from US$6.6 billion in 2020 to US$6.2 billion in 2021) and decline in program loans (48.4 percent^b decrease from US$7.5 billion in 2020 to US$3.9 billion in 2021).

These 2021 borrowings funded/will fund, among others:  (a) COVID-19 pandemic response which includes vaccine procurement, social protection and support to economic recovery (US$5.9 billion); (b) the Republic of the Philippines’ general financing requirements (US$5.9 billion); and (c) other infrastructure projects
(US$0.4 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 the 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. (BSP)

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^a Amounts may not add up due to rounding

^b Based on actual figures