MANILA -- The Monetary Board (MB) approved a total of US$2.80 billion of public sector foreign borrowings in Q2 2021, 59 percent lower than in the same period in 2020 of US$6.84 billion. These consist of: (a) one (1) Euro-denominated bond issuance amounting to EUR2.10 billion; and one (1) project loan amounting to US$300 million.

These foreign borrowings will fund the: (a) National Government’s general financing requirements (EUR2.10 billion); and (b) COVID-19 pandemic response covering vaccine procurement and distribution (US$300 million).

Under Section 20, Article VII of the 1987 Constitution of the Republic of the Philippines, prior approval by 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 21 January 1974 also requires all foreign borrowing proposals by the National Government, 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 resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability. (BSP)