THE BANGKO SENTRAL ng Pilipinas (BSP) approved $2.84 billion in foreign loans last quarter to support the government’s pandemic response.

The amount of approved loans was 19.36% bigger than the $2.38 billion the Monetary Board okayed in the first quarter of 2020, the central bank said in a press release on Monday.

Around $1.44 billion of the total were six project loans, $600 million was one program loan, and the remaining $798 million were for the two global bond issuances conducted by the government recently.

The government raised €2.1 billion (P122.4 billion) from a triple-tranche offering of euro-denominated bonds last month, selling €650 million (P38 billion) worth of four-year bonds, €650 million (P47 billion) in 12-year notes, and €800 million in 20-year debt papers.

This was its second global bond issuance for the year following the yen-denominated or “Samurai” bond sale conducted in March, from which it raised ¥55 billion (P24.2 billion) in three-year papers.

The BSP said it authorized the government to incur more foreign debt to boost its pandemic response, especially for its mass vaccination program ($900 million), to refinance other obligations and support this year’s budget ($798 million), and fund disaster resilience programs ($600 million).

The loans will also support the government’s social protection programs ($300 million), help it improve the transport sector ($138 million), and provide for maritime safety ($105 million).

The government obtained three loans from its multilateral partners in late March for its vaccination program, broken down into $500 million from the World Bank, $400 million from the Asian Development Bank, and $300 million from Asian Infrastructure Investment Bank.

The Constitution mandates the BSP Monetary Board to approve all of the foreign loans contracted or guaranteed by the government.

Last year, the BSP approved $17.7 billion in state foreign loans.

The country’s external debt stock grew 18% to $98.49 billion at end-2020  from $83.618 billion at end-2019, latest BSP data showed.

Meanwhile, latest data from the Treasury showed the government’s gross external borrowings reached P79.45 billion in the first quarter, or only half of the P146.686 billion borrowed in the same period in 2020.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — B.M. Laforga