MANILA, Philippines — More local government units (LGUs) are seeking the opinion of the Bangko Sentral ng Pilipinas (BSP) on their proposals to borrow money to finance crucial infrastructure projects.
According to the BSP, it received 154 requests for Monetary Board opinion from LGUs on their proposed loans amounting to P32.2 billion in the first semester of 2019.
The BSP rendered an opinion on 115 or 75 percent of the total number of requests with a total loan amount of P22.4 billion, while the processing of the remaining 39 requests were deferred due mainly to incomplete documents or information submitted.
Majority of LGU loans that were rendered an opinion came from Regions VI or Western Visayas with 15 requests and Region VIII or Eastern Visayas with 13 requests.
Western Visayas also topped the list in terms of the value of total loans with P4.92 billion, followed by CALABARZON with P3.66 billion, Ilocos with P3.49 billion, SOCCSKSARGGEN with P1.73 billion, Cagayan Valley with P1.27 billion, Bicol with P1.2 billion, Northern Mindanao with P1.1 billion, and Davao with P1.02 billion
Imus City was the biggest borrower with P2.76 billion to finance the construction of a new city government center and a green mid-rise five-story housing project for 149 informal settlers and low-income earning government employees as well as for its urban organic farming, installation of solar panels, water harvester and sewage treatment and acquisition of 35 multicabs and electric tricycles.
Ilocos Norte was the second biggest with P2.02 billion for the expansion of the provincial capitol or multipurpose building as well as the development of Dapayan commercial building and redevelopment of the Ferdinand Marcos stadium followed by Bacolod with P1.7 billion for the construction of the MassKara coliseum, development of Progreso relocation site, renovation of the Bacolod City college, and rehabilitation of various roads and bridges.
For the second semester of 2018, the BSP rendered an opinion for 143 requests with loans amounting to P26.65 billion.
Under Republic Act 7653 or the New Central Bank Act of 1993 as amended by RA 11211, government entities including LGUs are required to request for the prior opinion of the Monetary Board on their proposed borrowings.
“The said provision requires the government, its political subdivisions or instrumentalities, to request the Monetary Board to render its opinion on the monetary and external sector implications of their proposed loans prior to undertaking any credit operation,” the BSP said in a statement.
According to the central bank, the law stemmed from the BSP’s role as the government’s advisor on official credit operations.
“It enables the BSP to monitor trends in public sector debt and assess its impact on the monetary sector and externai payments position of the economy,” it added.