Forex caution trims foreign loan appetite

Concerns over foreign exchange (forex) losses might have prompted the Monetary Board (MB) to approve only $1.1 billion in public-sector foreign borrowings in the third quarter, sharply lower than the amount cleared in the same period last year.

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According to the Bangko Sentral ng Pilipinas (BSP) report released on Friday, Oct. 24, foreign borrowings approved by the MB in the quarter ending September were 71.1-percent lower than the $3.81 billion cleared in the same period in 2024.

These foreign borrowings, composed of two project loans for social protection, have mediumto longterm maturities, or credits with terms exceeding one year.

Meanwhile, MB-approved foreign loans for the public sector increased by 16.1 percent to $12.28 billion in the first three quarters from $10.58 billion in the same period a year ago. The year-to-date borrowings translate to around ₱720 billion.

Under the law, all foreign loan proposals by the national government (NG), its agencies, and government financial institutions (GFIs), as well as those guaranteed by the NG, must first be approved by the MB, the BSP's highest policy-making body.