Foreign borrowings approved by the central bank’s Monetary Board went up by 26 percent to $3.54 billion in the second quarter of the year from $2.8 billion in the same quarter last year as the government tapped the offshore debt market to raise funds for its financing requirements and its COVID-19 response measures.
The Bangko Sentral ng Pilipinas (BSP) reported that the borrowings from April to June this year included the government’s Japanese yen-denominated or Samurai bond issuance equivalent to about $513.41 million, three project loans amounting to $2.16 billion, and three program loans worth $869.72 million.
Of the amount, a total of $869.72 million would be used to fund the government’s COVID-19 pandemic response and recovery, including vaccine procurement and continuing requirements in light of the global health crisis, while $513.41 million would be for general financing requirements.
Furthermore, the $1.75 billion borrowed from the Asian Development Bank would help partially bankroll the $4.3 billion South Commuter Rail project and another $405.99 million would finance bridge projects.
For the first half of the year, BSP approved borrowings surged by 48 percent to $8.34 billion in the half of the year from $5.64 billion in the period last year.
Last year, foreign borrowings approved by the BSP Monetary Board declined by 26 percent to $13.1 billion from $17.7 billion in 2020. The Philippines borrows heavily from foreign and domestic creditors to finance the country’s budget deficit as it spends more than what it actually earns.
The budget deficit of the Philippines swelled to a record P1.67 trillion in 2021 as the pandemic-induced recession pulled down revenue collections, while expenditures jumped to finance COVID-19 response measures.