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.
The last loan granted by BSP to the national government came after the first 540 billion pesos loan approved in October 2020.
In March, the BSP loaned 300 billion pesos to the government through the form of titles in support of efforts against COVID-19.
Diokno said the government would pay off its last loan first before it could apply again.
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.
In December of last year, some P1.9 billion has been released to the country’s financial system following 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