Monetary Board approved US$3.32 billion foreign borrowings of the public sector in Q4 2023

For the period October to December 2023, the Monetary Board (MB) approved seven (7) public sector medium-to long-term (MLT) foreign borrowings amounting to US$3.32 billion.

The amount is 65.80 percent (or US$1.32 billion) higher than the US$2.0 billion MLT foreign borrowings approved for the same period last year.

Meanwhile, public sector foreign borrowings approved in 2023 aggregated to US$14.49 billion, consisting of the 24 MLT foreign borrowings:

(a) two (2) bond issuances (US$4.00 billion);

(b) 12 project loans (US$5.67 billion); and

(c) 10 program loans (US$4.82 billion).

These were 40.36 percent higher compared to the 2022 approvals of US$10.32 billion due to increase in:

(a) program loans (from US$0.87 billion in 2022 to US$4.82 billion in 2023); and

(b) project loans (from US$4.68 billion to US$5.67 billion in 2023) which more than offset the decrease in bond issuance (from US$4.77 billion in 2022 to US$4.00 billion in 2023).

These 2023 borrowings will fund the National Government’s (NG):

(a) infrastructure projects, including transportation (US$4.07 billion or 28.10 percent);

(b) general financing requirements (US$4.00 billion or 27.61 percent);

(c) economic recovery and development, environmental protection and climate resilience projects and programs (US$ 3.07 billion or 21.16 percent);

(d) COVID-19 pandemic response projects and programs (US$2.27 billion or 15.64 percent);

(e) agriculture projects (US$0.88 billion or 6.05 percent); and

(f) education projects (US$0.21 billion or 1.45 percent)

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 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.

*Figures may not add up due to rounding