The Philippine national government has paid in full its PhP300 billion loan with the Bangko Sentral ng Pilipinas (BSP), over a month before the Rodrigo Duterte administration steps down and ahead of the maturity date next month.
The country’s Department of Finance (DOF) said the national government settled the P300-billion provisional advances ahead of its maturity of June 11, 2022.
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Finance Secretary Carlos G. Dominguez III has said that the repayment of the PhP300-billion outstanding provisional advances with the central bank is aimed to fulfil the goal to “unwind the pandemic-related liquidity support from the BSP before the start of the next administration.”
The provisional advances is a temporary measure under Section 89 of Republic Act (RA) No. 7653 or The New Central Bank Act that allows the BSP to extend short-term financing to the national government to the extent of 20 percent of the latter’s average annual income in the past three years.
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The provisional advances have ensured steady access to cash for the uninterrupted delivery of large fiscal responses.
The volume of the provisional advances was downsized from PhP540 billion in 2021 to PhP300 billion in January this year, which is only half of the maximum available amount of PhP600 billion due to sustained economic recovery and strengthening of revenue collections.
