BSP to loan out another P300 billion to Philippine government

The Bangko Sentral ng Pilipinas (BSP) is set to loan out another P300 billion to the Philippine national government, as budgetary support as the country continues to address the impact of the COVID-19 pandemic.

At a virtual briefing on Thursday, BSP Governor Benjamin Diokno said the Monetary Board approved the provisional advance on December 16, 2021, after the national government fully settled its P540-billion outstanding obligation on December 10, 2021.

“In approving the national government’s request, the Monetary Board recognized that fiscal authorities still need to continue using available policy space in order to support the economic recovery,” he told reporters.

The new provisional advance will have 0% interest, following the previous loan with an extended maturity on January 12, 2022.

Diokno last year said the BSP is ready to use all the tools necessary to soften the potential economic slowdown brought about by the pandemic.

The BSP has already loaned out P540 billion to the Philippine government in July, mainly to be used for budgetary support as the country faces a fiscal deficit due to the pandemic.

It earlier approved two loans worth P540 billion each to the national government in December 2020 and another in October 2019.

“These interventions are especially crucial to sustain the economy’s momentum given the significant downside risks to growth linked to the spread of new COVID-19 variants,” Diokno said Thursday.

The rise in cases caused the reimposition of the Alert Level 3 in the National Capital Region starting Monday, January 3. This will last until January 15, 2022. — RSJ, GMA News