BSP reviewed 391 LGU loan proposals in 2021 (Sabong News)
Author
Lee C. Chipongian
Date
APRIL 28 2022
The Bangko Sentral ng Pilipinas (BSP) has reviewed and processed 391 borrowing requests from local government units (LGU) last year for loans amounting to P102.9 billion.
Under the law, government entities including LGUs are required to seek Monetary Board — the BSP’s policy-making arm – opinion on their proposed borrowings. The BSP, as the government’s advisor on official credit operations, is mandated to “monitor trends in public sector debt and assess its impact on the monetary sector and external payments position of the economy.”
The BSP said Thursday, April 28, that in its “continued commitment to transparency and good governance” it is informing the public that in the second semester of 2021, the Monetary Board issued an opinion to 193 requests for proposed LGU borrowings. This was lower compared to 198 requests from LGUs in the first six months of 2021.
“However, in terms of the total loan amount, the second semester 2021 LGU loans amounted to P55.7 billion, an 18 percent increase from the P47.2 billion total LGU loans in the previous semester,” according to the BSP.
By type of LGU, the requests for Monetary Board opinions came from nine provinces with proposed loans amounting to P6.6 billion and 33 cities with loans of P31.9 billion. There were also 149 municipalities and two barangays proposing to borrow P17.2 billion and P18.5 million, respectively.
For the full-year, the BSP said the Monetary Board “rendered its opinion on 206 LGU proposed borrowings totaling P56.4 billion.” These issuances were for 169 requests received in the second semster and 37 requests received in the first semester of 2021.
About 70 percent of the total proposed LGU loans with Monetary Board opinions were for infrastructure projects such as the construction of multi-purpose buildings/business/commercial centers, public markets, water systems, farm-to-market roads and bridges, government buildings, health care facilities or hospitals and school buildings, among others.
Another 20 percent of proposed loans were for the acquisition of heavy equipment and procurement of rescue and/or service vehicles while 8.3 percent were for the acquisition of lots and site development. A small 0.7 percent of proposed loans were for the construction of Covid-related isolation facilities and 0.5 percent were for refinancing.
