Home Business Monetary Board approves foreign loans of $3.81 billion in the third quarter

Monetary Board approves foreign loans of $3.81 billion in the third quarter

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Monetary Board approves foreign loans of $3.81 billion in the third quarter

THE MONETARY COUNCIL (MB) has approved $3.81 billion in public sector foreign loans in the third quarter, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

Approved public sector foreign loans rose 36% in the July to September period from $2.81 billion a year ago, the BSP said in a statement.

On a quarterly basis, interest rates fell 2.31%, compared with $3.9 billion in approved public sector foreign loans in the April to June period.

The central bank approved a bond issue worth $2.5 billion, two project loans worth a combined $535.97 million and a program loan worth $778.59 million.

The proceeds from the bond issue will be used for the general budget of the central government Ffinancing and financing or refinancingFfinancing assets in accordance with the Philippine Sustainable Finance Framework.

“Meanwhile, the other loans will cover projects in the areas of maritime security/support ($448.41 million) and agricultural reforms ($87.56 million) and a program for economic recovery, environmental protection and climate resilience ($778.59 million),” it said BSP.

The 1987 Constitution requires the Monetary Council to approve all foreign loan agreements entered into by the national government.

The BSP must also, in principle, approve all foreign loan proposals from the national government and government agencies and government financial institutions before negotiations.

“The Bangko Sentral ng Pilipinas shall promote the judicious use of resources and ensure that external debt requirements are at manageable levels to support external debt sustainability,” the central bank said.

The latest BSP data shows the country’s external debt burden fell 7.6% to $7.693 billion at the end of July, compared to $8.329 billion a year ago.

The debt service burden refers to the amount of money a country needs to repay its foreign creditors.

As of the second quarter, the debt burden as a percentage of gross domestic product (GDP) stood at 3.1%, slightly lower than the 3.6% in 2023.

The country’s total outstanding foreign debt rose by 8.3% to a record $130.18 billion at the end of July.

The country’s total outstanding foreign debt had risen 10.4% to a record $130.182 billion at the end of June, separate BSP data showed, bringing the external debt-to-GDP ratio to 28.9% came.

The latest data from the Bureau of the Treasury (BTr) also showed that the national government’s outstanding debt fell by 0.9% month on month to €15.55 trillion at the end of August.

National government debt as a percentage of GDP stood at 60.9% in the second quarter, up from 61% a year ago and 60.1% in the previous quarter.

The government is targeting a debt ratio of 60.6% of GDP by the end of the year. This is still slightly above the 60% threshold considered achievable for developing economies.

It aims to further reduce the ratio to 56% by 2028. Aaron Michael C. Sy

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