The central bank approved more foreign borrowings by the government in the third quarter of 2021 by nearly 20 percent higher than in the same period last year to help finance economic recovery as the COVID-19 pandemic continues.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said its policy making Monetary Board approved a total of $4.66 billion in public sector foreign borrowings between July and September 2021.

This was 18.9 percent higher than the $3.92 billion foreign borrowings approved in the same period in 2020.

The central bank said these borrowings consisted of one bond issuance amounting to $3 billion, three project loans amounting to $855.94 million and two program loans amounting to $800 million.

The BSP listed the funding and programs as:

• $3 billion for general financing requirements

• $800 million for youth employment and financial sector

• $300 million for disaster resilience

• $280 million for agriculture sector assistance

• $275.94 million for emergency response

Under the 1987 Constitution, prior approval of the central bank — through the seven-person Monetary Board — is required for all foreign loans to be contracted or guaranteed by the Republic of the Philippines.

Similarly, Letter of Instruction No. 158 dated Jan. 21, 1974 also requires all foreign borrowing proposals by the national government, government agencies and government financial institutions to be submitted for approval-in-principle by the Monetary Board before commencement of actual negotiations.

The Department of Finance earlier said that foreign financing secured by the Philippines to bankroll its fight against the prolonged COVID-19 pandemic have risen to $22.51 billion or more than P1.1 trillion to date.

The latest data showed that $20.06 billion in combined external loans, grants and commercial borrowings, which were earmarked for COVID-19 response, had been injected into the national budget.

Grants given to the Philippines by multilateral lenders and bilateral development partners amounted to $54.06 million, while loans for specific pandemic response-related projects hit $2.39 billion.

The BSP earlier said that the country’s external debt profile remains manageable — and will likely remain so — despite increased foreign borrowings to support the national government’s pandemic response.

Although foreign borrowings grew by $14.9 billion in 2020, the economy continues to have the capability to service its maturing foreign obligations in view of the country’s manageable debt profile, relatively low external debt-to-gross domestic product ratio and low debt service ratio, BSP Governor Benjamin Diokno said.