LGUs sought BSP OK for P47.2 billion loans in H1

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has received P47.2 billion worth of loan proposals from local government units (LGUs) for their infrastructure projects.

The Monetary Board (MB), the policy-making body of the BSP, has obtained 198 requests filed by LGUs in the first semester.

According to the BSP, the amount submitted in the first half increased by more than 10 percent from P42.8 billion in the latter half of 2020.

Municipalities made up bulk of the proposals at 157, with a total value of P19.1 billion, followed by cities with 18 filings worth P15 billion. Further, provinces filed for 21 projects (P13 billion), while barangays sought the evaluation for two (P25.5 million).

A total of 184 MB opinions were released in the first semester, covering P44.8 billion of the loan proposals filed by the localities. The issuances covered 157 requests submitted from January to June, while the other 27 were transmitted during the second semester of last year.

The remaining 41 requests, on the other hand, will be provided with MB opinion once the local governments have completed the requirements.

Based on records, more than two-thirds of the loan proposals intend to fund public infrastructure like government buildings, wet markets, convention halls, farm to market and access roads, and water system.

Some of the projects also respond to the demands of the pandemic, as they seek to raise health facilities and hospitals for added medical capacity.

On the other hand, over 20 percent of the loan proposals seek to finance the acquisition of new equipment and machineries, as well as rescue and service vehicles. The BSP said 10 percent of the proposed borrowings will bankroll the development of sanitary landfills, waste management and recovery facilities.

The remaining two percent of the proposed loans are aligned to support the pandemic response of the government. The financing that local governments will get from this segment will be used to put up isolation centers, acquire medical vehicles and buy testing kits and personal protective equipment.

Under the BSP’s charter, the MB needs to issue a prior opinion first before government offices, including localities, can proceed with the acquisition of a loan.

The provision requires the government, its agencies and instrumentalities, to ask the MB for an opinion on how the financing they will obtain would affect the country’s monetary standing.