BSP-approved foreign borrowings up in Q1

MANILA, Philippines — The Bangko Sentral ng Pilipinas approved $4.80 billion of foreign borrowings by the government in the first quarter to fund the state's coronavirus programs and other expenses.

That was 69% higher than the amount that the Monetary Board approved in the same period last year, the BSP said in a statement on Wednesday.

Broken down, the additional external debts include one bond issuance amounting to $2.25 billion and three project loans with combined worth of $2.55 billion.

READ: Government raises $2.25-B new debt via triple-tranche bond offer

The proceeds from the bond sale will be used to finance the state’s general budgetary needs, the central bank said.

Meanwhile, the three project loans will go to transportation projects ($2.08 billion), pandemic response ($300 million) and infrastructure projects ($175.10 million).

The government embarked on a borrowing spree in the past two years to fund its health crisis response, which included purchase of vaccines. Figures from the Budget department showed the Duterte administration is planning to borrow P3 trillion from onshore and offshore creditors in 2022 to bridge its budget deficit.

Under the Constitution, the government needs to secure the approval of the BSP first before it can contract or guarantee foreign loans. This is to promote the judicious use of the resources and ensure that external debt requirements are at manageable levels. — Ian Nicolas Cigaral