THE central bank said they have approved $2.38 billion worth of National Government (NG) foreign borrowings in the first quarter of 2020 which was 30 percent lower than same time last year of $3.42 billion.
The NG or public sector loans were broken down as: Euro bond issuance of EUR1.2 billion ($1.3 billion); four project loans worth $493 million; and two program loans amounting to $800 million.
The Bangko Sentral ng Pilipinas (BSP), in a statement, said the NG will use these foreign loans for general financing requirements and to fund infrastructure development and transport connectivity projects.
The funds will also finance the implementation of the Philippine Competition Act as well as programs to “develop youth employment opportunities and resilience to natural disasters.”
About $219.8 million or 9.23 percent of external borrowings will go to infrastructure flagship projects of the Duterte administration’s “Build, Build, Build” (BBB) program such as those under the Project Management Consultancy of the Philippine National Railways South Long Haul Project.
The BSP is mandated by law or Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, to review and approve all foreign loans, both from the public and private sector, to ensure its “judicious use” for the management and sustainability of external debt, said the BSP.
The BSP used to impose a limit on foreign loans but with the BBB funding requirements, setting a cap was temporarily suspended. Foreign borrowing limits was an inherited program from the days when the Philippines was still under the tutelege of the International Monetary Fund.
As of end-2019, the country’s outstanding external debt went up by 5.9 percent year-on-year to $83.6 billion.
`Public sector external debt totaled $42.8 billion as of December 2019 from $42.5 billion end-September 2019. About $36 billion were NG loans while $6.7 billion were borrowed by government-owned and con¬trolled corporations, government financial institutions and the BSP.
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