The Monetary Board (MB) approved the National Government (NG) foreign borrowings in the second quarter of 2020, with a total amount of US$6,840.995 million, higher by US$3,800.493 million (125 percent) from the second quarter 2019 level of US$3,040.502 million.
The foreign borrowings consist of: (a) one bond issuance aggregating to US$2,350.000 million; (b) three project loans amounting to US$340.995 million; and (c) six program loans amounting to US$4,150.000 million.
These borrowings will fund the NG’s: (a) general financing requirements for 2020 (US$2,350.000 million); (b) programs in response to the COVID19 pandemic (US$4,450.000 million); and (c) projects in infrastructure development (US$40.995 million).
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 Jan. 21, 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 assure external debt sustainability.
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