BSP Approves P540B in Another Philippine Government Loan Application

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Bangko Sentral ng Pilipinas has granted another loan request from the Philippine government – the third request in 2020 – for budget support amid a budget deficit resulting from the COVID-19 pandemic.

At the Kapihan sa Manila Bay virtual forum on Wednesday, BSP Governor Benjamin Diokno announced that the Central Bank’s Monetary Council had approved the government’s request for 540 billion pesos at the end of December 2020.

“We just approved it on December 28th. In the last week of the year, we just accepted. It’s a done deal, ”Diokno said.

BSP’s latest loan to the national government came after the first loan of 540 billion pesos approved in October 2020.

In March, the BSP loaned the government 300 billion pesos in the form of securities in support of efforts against COVID-19.

Diokno said the government would pay off its last loan first before it could make another request.

In addition to lending money to increase the government’s budget, the central bank has responded to the pandemic with easing monetary policy, he added.

As of December last year, some 1.9 trillion pesos had flowed into the country’s financial system as a result of the BSP’s monetary easing measures.

The central bank has so far cut its key rates by 200 basis points this year: by 25 basis points in February; 50 basis points each in March, April and June; and another 25 basis points in November. —LBG, GMA News


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