MANILA, Philippines — Public sector loans approved by the Bangko Sentral ng Pilipinas (BSP) more than doubled to $7.35 billion last year from $3.48 billion in 2017 amid the government’s massive infrastructure build up.
According to a report released by the central bank, the public sector loans approved by the BSP increased by $3.87 billion as the government ramped up spending on infrastructure development under its massive infrastructure program.
The BSP said the borrowings would fund transport connectivity projects particularly roads, railways, port and airport infrastructure.
It said the loans would also bankroll irrigation and agriculture development, flood management as well as the reconstruction and development of Marawi City.
The approved loans consisted of $3.6 billion in bonds, 12 project loans worth $2.85 billion, and three program loans worth $900 million.
The BSP said about 18 percent of loans or $1.36 billion would fund five infrastructure flagship projects to accelerate infrastructure spending and generate robust economic growth and employment.
These include the $941.92 million Metro Manila subway project Phase 1, the $172.6 million new Cebu international container port project, the $143.53 million Cavite industrial area flood risk management project, the $62.09 million Chico River pump irrigation project, and $39.43 million new Bohol airport construction and sustainable protection project.
While public sector loans increased year-on-year, the BSP said the country’s external debt position remains at prudent levels.
The country’s external debt has exhibited a general downward trend to $73.1 billion in end 2017 from $79.9 billion in end 2012 before growing by eight percent to $79 billion in end 2018 due largely to net availments by both public and private sectors.
Latest data showed the country’s external debt went up by 1.9 percent to $80.4 billion in end-March this year.
Despite the rise in external debt, the country’s debt service ratio (DSR) has consistently remained at single digit level and stood at 5.1 percent as of end-March, well below the international benchmark of 20 to 25 percent.
The DSR relates principal and interest payments to exports of goods and receipts from services and primary income. It is a measure of adequacy of the country’s foreign exchange earnings to meet maturing debt obligations.