Connect with us

Hi, what are you looking for?


Gov’t seeks P300-B loan from BSP

THE PHILIPPINE government will be asking the central bank for P300 billion in liquidity support next year, less than the previous loan after the country’s economic outlook improved, the Finance chief said.

In a letter to the Bangko Sentral ng Pilipinas (BSP), Finance Secretary Carlos G. Dominguez III said the government would make the request as a provisional advance in the second week of January.

Compared with the previous P540-billion debt, he said the reduced amount signals “that we are on track with the unwinding of liquidity support on firmer evidence of a return to economic strength.”

The Department of Finance (DoF) in a press release on Wednesday said it plans to repay the outstanding P540 billion this week, ahead of the Jan. 12 maturity date.

“The extension of provisional advances is a temporary arrangement between the BSP and the National Government to provide the government access to ample cash resources while revenue generation is weakened,” the DoF said.

Provisional advances are also done while the borrowing program faces a larger need and unpredictable financial markets, it added.

Republic Act No. 7653 or The New Central Bank Act allows the BSP to make direct provisional advances with or without interest to the National Government. These must usually be repaid in three months, but can be extended for another three.

An initial advance in the form of a P300-billion zero-interest repurchase agreement was granted in March last year and repaid by September 2020.

“The provisional advances were then converted to a zero-interest three-month loan in the amount of P540 billion, granted in October 2020 and fully repaid in December 2020,” the DoF said. “These were again accessed in January 2021, extended in April 2021, and fully repaid in July 2021.”

The most recent provisional advance in July will be repaid this week.

The new advances to be requested in January will have zero interest, along with the three-month maturity with another three-month extension.

“We have seen economic recovery already begin to take root as more businesses embark on a safe reopening with the successful rollout of the government’s mass vaccination program,” Mr. Dominguez said in his letter.

“The extension of a new P300-billion provisional advance will ensure sufficient resources for the government to safeguard this promising but still fragile recovery.”

National Treasurer Rosalia V. de Leon said the P300 billion should be fully repaid by the end of June to fully unwind liquidity support before the next administration takes office.

“Funds granted under this short-term lending arrangement are not used for direct financing of government operations but serve as a liquidity gap measure that ensures the government will be able to undertake large spending in advance of anticipated revenue collections or regular borrowing proceeds,” the DoF said. — Jenina P. Ibanez

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



THE PESO is expected to strengthen versus the dollar this week ahead of the release of the latest Philippine manufacturing data and expectations of...


BW FILE PHOTO LOCAL EQUITIES are expected to trade with a downward bias this week as investors are expected to pocket their profits as...


The National Government’s budget deficit ballooned to P99.1 billion in October, as state spending outpaced revenue collections, the Bureau of the Treasury (BTr) reported...


LIONEL MESSI (ARG), celebrates with team in Group C match between Argentina 2-0 Mexico at Lusail Stadium in Lusail, Qatar. — NAOKI MORITA/AFLO SPORT/REUTERS DOHA —...


THE BLUE Eagles on Saturday got payback on rival and reigning champion UP with a 75-67 win. — UAAP MEDIA CLINCHING a twice-to-beat bonus...


TAI BIERRIA unloaded a match-high 21 points while presiding over her team’s net defense with three blocks. — PHILIPPINE STAR/JUN MENDOZA Games Tomorrow(PhilSports Arena)2:30...

You May Also Like


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.