THE Monetary Board (MB) has 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 $4.2 billion approvals in the same period in 2020.
These consist of: (a) two project loans amounting to $0.5 billion; and (b) six program loans amounting to about $2.5 billion.
These borrowings will fund (a) Covid-19 pandemic response and economic recovery measures ($2.7 billion); and (b) disaster risk reduction ($0.3 billion).
Meanwhile, public sector foreign borrowings approved in 2021 reached $13.1 billion. These consist of: (a) four bond issuances ($6.2 billion); (b) 12 project loans ($3.1 billion); and (c) nine program loans ($3.9 billion).
Borrowings approved in 2021 were 25.9 percent lower compared to the 2020 figure of $17.7 billion due to lower bond issuances (6.2 percent decrease from $6.6 billion in 2020 to $6.2 billion in 2021) and a decline in program loans (48.4 percent decrease from $7.5 billion in 2020 to $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 ($5.9 billion); (b) the Republic of the Philippines’ general financing requirements ($5.9 billion); and (c) other infrastructure projects ($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, through the MB, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Similarly, Letter of Instructions 158 dated January 21, 1974 also requires all foreign borrowing proposals by the National Government, government agencies and government financial institutions to be submitted for approval-in-principle by the MB before the commencement of actual negotiations. (PR)