MB approves $3.32B in public-sector foreign borrowing in Q4
THE Monetary Board (MB) approved borrowing by government entities worth $3.32 billion in the fourth quarter, bringing external loan approvals to $14.49 billion for 2023.
The fourth-quarter total is 65.8% higher than the $2 million worth of foreign borrowing by the public sector that the MB approved a year earlier.
Quarter on quarter, foreign borrowing rose 23%.
In 2023, the MB approved 24 separate medium- to long-term instances of foreign borrowing, including two bond issuances ($4 billion), 12 project loans ($5.67 billion), and 10 program loans ($4.82 billion).
The $14.49 billion brought government external borrowing in 2023 up 40.4% year on year.
According to the Bangko Sentral ng Pilipinas (BSP), foreign borrowing in 2023 funded the National Government’s economic recovery, environmental protection and climate resilience programs, as well as general financing requirements.
It also funded pandemic response programs and projects in agriculture and education.
The 1987 Constitution requires the Monetary Board to approve any foreign loan agreement that is entered into by the National Government.
“The BSP promotes the judicious use of resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability,” the central bank added.
The BSP reported that the external debt service bill rose 132.8% to $11.938 billion at the end of October.
The debt service bill was equivalent to 3.5% of gross domestic product (GDP), against 1.6% a year earlier.
The BSP also estimates that outstanding external debt increased 10.1% to $118.833 billion at the end of September, from $107.91 billion a year earlier. Debt levels were up 0.8% from the end of June.
External debt refers to all types of borrowings by Philippine residents from nonresidents, following the residency criteria for international statistics.
The external debt ratio, or external debt as a percentage of GDP, was 28.1%, slightly lower than 28.5% in the previous quarter.
The government borrows from domestic and external sources to help fund a budget deficit, which is capped at 5.1% of GDP this year. — Keisha B. Ta-asan