THE MONETARY BOARD (MB) has approved $3.9 billion of public sector foreign borrowings in the second quarter, the Bangko Sentral ng Pilipinas (BSP) said.
Approved public sector foreign borrowings were 43% higher than $2.73 billion recorded approvals in the April-to-June period a year ago, the BSP said in a statement on Monday.
It was also up by 35.9% from $2.87 billion worth of foreign borrowings by the public sector in the first quarter.
Broken down, the central bank approved a bond issuance worth $2 billion and three project loans amounting to $1.9 billion.
“These borrowings will fund the National Government’s general budget financing and financing/refinancing of assets in line with the Republic of the Philippines’ Sustainable Finance Framework ($2 billion) and transport infrastructure projects ($1.9 billion),” the BSP said.
The 1987 Constitution requires the Monetary Board to approve any foreign loan agreements entered into by the National Government.
The BSP must also approve in principle any foreign borrowing proposals by the National Government, government agencies and government financial institutions before actual negotiations.
“The Bangko Sentral ng Pilipinas promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability,” it added.
Latest data from the central bank showed that the country’s external debt service burden fell by 20% to $4.64 billion at end-April from $5.785 billion a year ago.
The debt service burden refers to the amount of money a country needs to pay back its foreign creditors.
As of the first quarter, the debt service burden as a share of gross domestic product (GDP) stood at 3%, lower than 4.3% a year ago.
Separate data from the BSP showed that the country’s total outstanding external debt had risen by 8.3% to a record $128.7 billion as of end-March.
This brought the external debt-to-GDP ratio to 29% from 28.9% a year earlier.
Latest data from the Bureau of the Treasury (BTr) showed that the National Government’s outstanding debt rad risen to a fresh high of P15.35 trillion as of end-May.
The National Government’s debt as a share of the GDP stood at 60.2% in the first quarter, from 61.1% a year ago and 60.1% at the end of 2023.
The government is targeting a 60.3% debt-to-GDP ratio by yearend. This is still slightly above the 60% threshold deemed manageable for developing economies.
It seeks to further bring down the ratio to 55.9% by 2028.
The government’s borrowing plan is pegged at P2.57 trillion this year, 75% of which will come from domestic sources and the rest from foreign sources.
The BTr earlier reported that the National Government’s gross borrowings rose by 16.1% to P1.42 trillion in the first five months from P1.22 trillion a year earlier. — Luisa Maria Jacinta C. Jocson