The Bangko Sentral ng Pilipinas (BSP), in its continued commitment to transparency, has released information on the issuances of Monetary Board (MB) opinion to local government units (LGUs) on their proposed domestic borrowings on a semestral basis. This set of information includes the amount and intended purpose of the proposed loans by various LGUs, as well as the numbers and dates of the MB opinion issuances.
For the first semester (S1) of 2020, the BSP received 93 requests for MB opinion from LGUs on their proposed loans amounting to P25.1 billion, as shown in the accompanying table (link below). The number of LGU requests for MB opinion were higher by 31.0 percent from 71 requests received in S2 2019. Requests for MBO processed in S1 2020 came from 11 provinces, 13 cities, and 69 municipalities.
Of the total number of LGU requests, 78 requests or 83.9 percent were rendered an MB opinion, with a total loan amount of P22.3 billion. The processing of the remaining 15 requests were deferred due to incomplete documents or information submitted. Among the 17 Philippine regions, the largest number of LGU requests that were rendered an MB opinion came from SOCCSKSARGEN (Region XII) at 14.1 percent of the total requests with MB opinion, with loan purposes that are mostly intended for infrastructure projects and acquisition of heavy equipment.
The prior opinion of the MB on the proposed borrowings of government entities, including LGUs, is mandated by law under Section 123 of Republic Act (R.A.) No. 7653, otherwise known as the New Central Bank Act of 1993, as amended by R.A. No. 11211. The said provision requires the government, its political subdivisions or instrumentalities, to request the MB to render its opinion on the monetary and external sector implications of their proposed loans prior to undertaking any credit operation. This provision of the law stems from the BSP’s role as the government’s advisor on official credit operations. It enables the BSP to monitor trends in public sector debt and assess its impact on the monetary sector and external payments position of the economy.
Further information on this matter, particularly the BSP guidelines for the processing of requests for MB opinion can be accessed on the BSP website. (http://www.bsp.gov.ph/regulations/reg_others.asp).
Source: Bangko Sentral ng Pilipinas (BSP)