Monetary Board approved US$3.919 billion foreign borrowings

Monetary Board approved US$3.919 billion foreign borrowings of the National Government in the third quarter of 2020

The Monetary Board (MB) approved National Government (NG) foreign borrowings in the third quarter of 2020 aggregating US$3.919 billion, higher by US$1.265 billion (47.69 percent) from the third quarter 2019 level of US$2.654 billion. These consist of: (a) five [5] project loans amounting to US$1.979 billion; and (b) six [6] program loans amounting to US$1.940 billion.

These foreign borrowings will fund the NG’s: (a) infrastructure development (US$1.458 billion); (b) response to the COVID-19 pandemic (US$1.247 billion); (c) agrarian reform and agriculture development (US$770.000 million); (d) financial inclusion programs (US$417.420 million); and (e) local governance reforms (US$26.530 million).

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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 MB, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines. Similarly, Letter of Instructions No. 158 dated 21 January 1974 also requires all foreign borrowing proposals by the NG, 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.

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