Bangko Sentral ng Pilipinas main office in Manila. -- CRAG

THE MONETARY BOARD (MB) approved $2.87 billion in public-sector foreign borrowings in the first quarter, the central bank said.

The amount approved in the three months to March period was 48% lower year on year, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Monday.

On a quarter-on-quarter comparison, approvals fell 13.55% from the fourth quarter of 2023.

The MB greenlit two project loans totaling P850 million and five program loans worth $2.02 billion.

“These borrowings will fund the National Government’s projects on infrastructure ($850 million), and programs on policy reforms in healthcare ($910 million), digital transformation ($410 million), tax administration ($400 million), and inclusive finance development ($300 million),” the BSP said in a statement. 

The 1987 Constitution tasks the Monetary Board to approve foreign loan agreements entered into by the National Government.

“The Bangko Sentral ng Pilipinas promotes the judicious use of resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability,” it said.

Outstanding external debt rose 12.7% year on year to $125.4 billion at the end of December, equivalent to 28.7% of gross domestic product (GDP).

It was also 5.5% higher from  the end of September.

The National Government plans to borrow P2.46 trillion this year, of which P1.85 trillion will be sourced from the domestic market, and P606.85 billion from overseas, according to the latest Budget of Expenditures and Sources of Financing report.

The government borrows from domestic and external sources to help fund a budget deficit, which is capped at 5.6% of GDP this year. — Beatriz Marie D. Cruz