The national government has requested lower funding accommodation from the Bangko Sentral ng Pilipinas (BSP) amounting to PHP300 billion.
“As an encouraging sign of improving public finances, the national government requested for only PHP300 billion in provisional advances this January, lower than the previous advance of PHP540 billion,” BSP Governor Benjamin Diokno said in a virtual briefing on Thursday.
Since the pandemic hit in 2020, the BSP extended provisional advances to the national government.
Initially, it was through a PHP300 billion reverse repurchase (RRP) agreement made in March 2020.
The RRP or repo agreement has a three-month term, with a clause for another three months extension. It was fully redeemed in September 2020.
The next three loans, amounting to PHP540 billion each, have three-month terms, three-month payment leeway, and have no interest.
These loans were granted in October 2020, January 2021, and July 2021.
Republic Act 7653, otherwise known as the New Central Bank Act, allows the BSP to extend provisional advances to the national government equivalent to 20 percent of its average revenues in recent years.
Finance Secretary Carlos Dominguez III earlier attributed the lower loan to improved economic outlook.
In a letter addressed to Diokno, Dominguez said this amount is a signal to the market about the “strong monetary and fiscal coordination in ensuring that the Philippines remains resilient in this crisis.”
Source: Philippines News Agency