The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP), approved $3.32 billion worth of public sector foreign borrowings in the fourth quarter of 2023 to fund the government’s infrastructure and economic recovery plan.
It said the amount of public sector medium-to long-term (MLT) foreign borrowings was 65.80 percent higher than the $2 billion approved in the same period in 2022.
The BSP said that in the whole of 2023, the public sector foreign borrowings it approved reached $14.49 billion, up 40.36 percent from $10.32 billion in 2022.
It said the 24 MLT foreign borrowings last year included two bond issuances ($4 billion); 12 project loans ($5.67 billion); and 10 program loans ($4.82 billion).
These borrowings will fund the government’s infrastructure projects, including transportation ($4.07 billion); general financing requirements ($4 billion); economic recovery and development, environmental protection and climate resilience projects and programs ($ 3.07 billion); COVID-19 pandemic response projects and programs ($2.27 billion); agriculture projects ($0.88 billion); and education projects ($0.21 billion).
Latest data from BSP showed that the country’s outstanding external debt hit $118.8 billion as of end-September 2023, up by 0.8 percent from $117.9 billion as of end-June 2023.
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, the prior approval of the BSP through its MB is required for all foreign loans to be contracted or guaranteed by the government.
Letter of Instructions No. 158 dated Jan. 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 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.