The government is again borrowing for the third quarter this year of $4.56 billion, up by 52 percent over the same period last year to be used for a) general financing requirements; b) reform programs on youth employment and financial sector, c) disaster resilience; d) assistance to the agriculture sector and e) emergency response.
To further perk up the economy and enable it to rebound faster, the government is borrowing $4.56 billion for the third quarter, the bulk or $3 billion of which would finance its general financing requirements, hopefully not for the elections.
The Monetary Board, the highest policy- making of the financial system, approved this amount to be borrowed, which is 18.9 percent higher than the $3.92 billion approvals for the same period in 2020.
The borrowings would comprise of: (a) one bond issuance amounting to $3 billion; (b) three project loans worth $855.94 million; and (c) two program loans amounting to $800 million.
These borrowings will fund: (a) the Republic of the Philippines’ general financing requirements ($3 billion); (b) reform programs on youth employment and financial sector ($800 million); (c) disaster resilience ($300 million); (d) assistance to the agriculture sector ($280 million); and (e) emergency response ($275.94 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 the 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 January 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.
Tags: #govtborrowing, #economy, #governmenttoperationneeds, #bondissuance