BSP-approved foreign debt of gov’t down 71.1% in Q3
The Bangko Sentral ng Pilipinas (BSP) approved fewer foreign borrowings by the government in the third quarter, as fiscal planners front-loaded most of their offshore financing earlier in the year to lock in lower rates.
In a statement, the central bank said its Monetary Board cleared $1.1 billion in proposed public-sector foreign borrowings in the three months ending in September, down 71.1 percent from a year earlier.
By law, all foreign borrowing proposals by the national government, its agencies and government financial institutions—as well as loans guaranteed by the state—require prior approval from the Monetary Board.
The rule aims to ensure that the country’s foreign debt remains sustainable.
The BSP said the external financing it approved last quarter consisted of two project loans supporting social protection initiatives.
Such borrowings typically come from development partners like the World Bank and the Asian Development Bank, which offer concessional rates and favorable repayment terms that often include grace periods.
The BSP said the new foreign borrowings have medium to long-term maturities.
In the first nine months, public sector foreign borrowings were recorded at $12.28 billion.
Finance Secretary Ralph Recto earlier said the Marcos administration was already done with its commercial fundraising activities for the year. Recall that the government had front-loaded most of its offshore financing needs for 2025 in February with the sale of global and euro bonds.
Amid global uncertainties that can keep interest rates elevated and weaken the peso, Recto had said that the plan for the rest of the year was to borrow more domestically, explaining that there was still excess liquidity in the local economy looking for viable investment outlets.
