For the period October to December 2023, the Philippine Monetary Board has approved seven (7) public sector medium-to-long-term (MLT) foreign borrowings totalling US$3.32 billion.
The said amount is 65.8% (US$1.32 billion) higher than the US$2 billion MLT foreign borrowings approved for the same period last year.
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Meanwhile, public sector foreign borrowings approved in 2023 aggregated to US$14.49 billion, consisting of the 24 MLT foreign borrowings as follows:
- Two (2) bond issuances (US$4.00 billion);
- Twelve (12) project loans (US$5.67 billion); and
- Ten (10) program loans (US$4.82 billion)
These figures were 40.36% higher compared to the 2022 approvals of US$10.32 billion due to increase in the following:
- Program loans (from US$0.87 billion in 2022 to US$4.82 billion in 2023); and
- Project loans (from US$4.68 billion to US$5.67 billion in 2023) which more than offset the decrease in bond issuance (from US$4.77 billion in 2022 to US$4.00 billion in 2023).
These borrowings from Q4 2023 will fund infrastructure projects of the national government, including transportation (US$4.07 billion or 28.10%, general financing requirements (US$4.00 billion or 27.61%, economic recovery and development, environmental protection and climate resilience projects, as well as programs (US$ 3.07 billion or 21.16%).
The amount will also be used for COVID-19 pandemic response projects and programs (US$2.27 billion or 15.64%, agriculture projects (US$0.88 billion or 6.05%), and education projects (US$0.21 billion or 1.45%).
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, prior approval of the Bangko Sentral ng Pilipinas (BSP), through its Monetary Board, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Similarly, Letter of Instructions No. 158 dated January 21, 1974, requires all foreign borrowing proposals by the NG, government agencies and government financial institutions to be submitted for “approval-in-principle” by the Monetary Board before the commencement of actual negotiations.
The BSP promotes the judicious use of these resources and ensures that external debt requirements are at manageable levels to support external debt sustainability.
