Philippines' foreign loans for COVID-19 response at $15.5B

The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has approved $15.5 billion worth of foreign loans to finance the Philippines' efforts against the coronavirus disease 2019 (COVID-19) pandemic.

In a virtual briefing on Thursday, BSP Governor Benjamin Diokno said the latest figures include $1.2 billion for COVID-19 vaccines, as of May 7, 2021.

Based on the foreign exchange rate of P47.875:$1 on May 19, the foreign loans amount to P742.062 billion.

Under the Philippine Constitution, the approval of the Monetary Board is required for all foreign borrowings contracted or guaranteed by the national government.

Broken down by source, 33.0% or $5.1 billion of the loans are from various bondholders; 28.0% or $4.3 billion from the Asia Development Bank (ADB); and 23.7% or $3.7 billion from the World Bank.

Other sources include the Asian Infrastructure and Investment Bank (AIIB) with $1.1 billion or 6.8%; the Japan International Cooperation Agency (JICA) with $942 million or 6.1%; the Agence Francaise de Developpement with $283 million or 1.8%; and the Export-Import Bank of Korea with $100 million or 0.6%.

According to International Monetary Affairs and Surveillance Sub-Sector Officer-In-Charge Thomas Benjamin Marcelo, the Monetary Board approved a total of $2.84 billion worth of loans in the first quarter.

This includes six project loans worth $1.4 billion, two bond issuances worth P798 million, and one program loan worth P600 million.

"There's a broad spectrum of projects that were already approved by the Monetary Board for COVID-19 pandemic response programs as well as to support the economic recovery strategy of the government," Marcelo said.

Moving forward, Diokno said the economic managers are watching that the ratio of the country's debt to the gross domestic product (GDP) remains below the internationally recommended threshold of 60%.

The Philippines ended 2020 with a debt-to-GDP ratio of 54.6%, up from 39.6% in end-2019.

"We share the responsibility of managing public sector debt with the Department of Finance, the Development Budget Coordination Committee, and the Investment Coordination Committee," said Diokno.

The Philippine government has allocated P82.5 billion for the roll out of the mass inoculation program to cover around 55% of the country's population.—LDF, GMA News