February 8, 2023

Pinoy Trekker

Pinoy Trekker – We go anywhere

The Monetary Board approved $2 billion of public sector external debt in the fourth quarter of 2022

For the October-December 2022 period, the Monetary Board (MB) approved one (1) US$2 billion in foreign public sector borrowings, which is 32.95 percent lower than the 2 approved for the same period in 2021, $98 billion. This relates to a bond issue by the Republic of the Philippines to fund the general financing needs of the National Government (NG).

Meanwhile, foreign public sector borrowings approved in 2022 totaled US$10.32 billion and consisted of: (a) three (3) bond issues (US$4.77 billion); (b) seven (7) project loans (US$4.68 billion); and (c) three (3) program loans (US$0.87 billion). These were 21.43 percent lower compared to 2021 approvals of $13.14 billion due to: (a) lower bond issuance (22.50 percent decrease from $6.16 billion annually 2021 to $4.77 billion in 2022); and (b) significant decrease in program loans (down 77.52 percent from $3.88 billion in 2021 to $0.87 billion in 2022), which more than offset the increase in project loans (up 50.96 percent from $3.10 billion in 2021 to $4.68 billion). 2022).

This 2022 borrowing will fund: (a) general financing needs ($4.77 billion, or 46.22 percent); (b) transportation projects (US$3.63 billion or 35.20 percent); (c) projects and programs to combat the COVID-19 pandemic (US$1.35 billion or 13.09 percent); and (d) other infrastructure development projects (US$0.57 billion or 5.49 percent).

Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, prior approval of the Bangko Sentral ng Pilipinas (BSP) by its Board of Directors is required for all foreign loans to be completed or guaranteed by the Republic of the Philippines. Similarly, Instruction Letter No. 158 of January 21, 1974 stipulates that all proposals for foreign borrowing by the NG, government agencies and state financial institutions must be submitted to the MB for approval in principle before the actual negotiations begin. GNP promotes the wise use of resources and ensures that external debt requirements are at manageable levels to support external debt sustainability.