FOREIGN borrowings approved by the Bangko Sentral ng Pilipinas (BSP) dropped for the second straight year in 2022.

The central bank disclosed that approved foreign borrowings plunged 21.4 percent to $10.32 billion last year from $13.14 billion in 2021.

The decline was attributed to lower bond issuances, as well as the significant drop in program loans.

Bond issuances by the national government in the offshore market decreased by 22.5 percent to $4.77 billion last year from $6.16 billion in 2021. The Philippines tapped the offshore bond market thrice in 2022.

Program loans from multilateral lenders also declined by 77.5 percent to $870 million in 2022 from $3.88 billion in 2021.

Project loans rose by 51 percent to $4.68 billion from $3.1 billion.

According to BSP data, the bulk of the foreign borrowings last year at 46.2 percent or $4.77 billion was used to fund the national government’s general financing requirements.

About 35.2 percent or $3.63 billion bankrolled transportation projects, while 13.1 percent or $1.35 billion financed the government’s Covid-19 response projects and programs.

The remaining 5.5 percent or $570 million funded other infrastructure development projects.

For the fourth quarter alone, foreign borrowings approved by the BSP dropped 33 percent to $2 billion from $2.98 billion in the same quarter in 2021.

All foreign loans to be contracted or guaranteed by the government need prior BSP approval under Section 20, Article VII of the 1987 Constitution.

Likewise, all foreign borrowing proposals by the national government, government agencies, and government financial institutions have to be submitted for approval-in-principle by the BSP before start of actual negotiations, as mandated by the Letter of Instruction 158 issued in January 1974. (with PR)