MANILA, Philippines — Foreign borrowings approved by the Bangko Sentral ng Pilipinas (BSP) went down by 5.6 percent in 2024, as the national government borrowed less from offshore creditors.
Data released by the central bank showed foreign borrowings approved by the BSP’s Monetary Board amounted to $13.68 billion last year, $810 million lower than the $14.49 billion obtained in 2023.
The BSP attributed the decrease to lower program and project loans that offset the increase in global bond issuances. The regulator approved 21 medium to long-term borrowings in 2024.
The central bank approved 11 project loans worth $5.32 billion in 2024, a 6.2-percent decline from $5.67 billion in 2023.
Likewise, the BSP approved eight program loans amounting to $3.86 billion, 19.9 percent lower than the $4.82 billion approved in 2023.
On the other hand, national government borrowings via global bond issuances increased by 12.5 percent to $4.5 billion in 2024 from $4 billion a year ago.
About 32.9 percent or $4.5 billion of BSP-approved foreign borrowings in 2024 will be used for general financing requirements, while 31.8 percent or $4.35 billion will be used to fund infrastructure projects including transportation.
The central bank also said 21.8 percent or $2.98 billion would finance economic recovery and development, environmental protection as well as climate resilience projects and programs.
The government also allocated 9.9 percent or $1.36 billion to education programs and 3.6 percent or $490 million will be for agrarian reform and maritime safety projects.
For the fourth quarter of 2024 alone, BSP-approved foreign borrowings went down by 3.4 percent to $3.21 billion from $3.32 billion in the same quarter in 2023.
All foreign loans to be contracted or guaranteed by the government need prior BSP approval under Section 20, Article VII of the 1987 Constitution.
Likewise, all foreign borrowing proposals by the national government, government agencies and government financial institutions have to be submitted for approval-in-principle by the Monetary Board before commencement of actual negotiations as mandated by the Letter of Instructions 158 issued in January 1974.
“The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability,” the central bank said.
The Philippines borrows heavily from foreign and domestic creditors to finance the government’s budget deficit as it spends more than what it actually earns.