The Bangko Sentral ng Pilipinas Monetary Council approved a total of $ 2.80 billion in foreign public sector borrowing in the second quarter of 2021.
But the BSP noted that approved foreign borrowing was 59% lower than the $ 6.84 billion borrowed during the same period in 2020.
According to the BSP, the government’s external loans during the period consist of a euro bond issue in the amount of 2.10 billion euros and a project loan in the amount of 300 million dollars.
“These external loans will finance: (a) the general financing needs of the national government (2.10 billion euros); and (b) the response to the COVID-19 pandemic, covering the purchase and distribution of vaccines ($ 300 million), ”BSP said.
Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, the prior approval of the BSP, through its Monetary Board, is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.
Likewise, Letter of Instructions No.158 of January 21, 1974 also requires that all proposals for foreign borrowing from the national government, government agencies and government financial institutions be subject to the approval in principle of the Council. monetary policy before the start of negotiations.
This constitutional provision, said PASB, encourages the judicious use of resources and ensures that external debt requirements are at manageable levels, in order to support external debt sustainability. —Ted Cordero / LBG, GMA News