The Bangko Sentral ng Pilipinas (BSP) said it recorded an increase in local government borrowing requests in the second half of 2023.
The BSP said it received 159 requests for Monetary Board opinions (MBOs) on LGUs’ proposed domestic borrowings amounting to P48.9 billion from July to December last year.
It said these figures were higher by 15.2 percent and 13.5 percent, respectively, compared with the 138 requests amounting to P43.1 billion in the first semester of 2023.
The requests for MBOs came from 123 municipalities (P15.9 billion), 20 cities (P22.6 billion), 11 provinces (P10.3 billion) and five (5) barangays (P109.3 million) which were located mostly in Central Luzon, CALABARZON, Bicol Region, Western Visayas, Central Visayas and SOCCSKSARGEN.
The MB rendered its opinion on 143 LGU proposed borrowings totaling P45 billion. The MB issuances were for 125 requests received in the second half of 2023 and 18 requests received in first semester of 2023.
The remaining 34 requests received in the semester under review are awaiting the submission of complete information and/or documentary requirements by the borrowing institutions.
It said the majority of loans were intended for infrastructure projects (61.4 percent), such as the construction and/or improvement of farm-to-market/access roads and bridges, public markets, multi-purpose buildings/ business/ commercial centers, health care facilities or hospitals, school buildings, solid waste management/materials recovery facilities, water system and septage treatment and drainage and sewerage systems.
About 19.5 percent of LGU borrowings were intended for the acquisition of lots and/or site development for the eventual construction of various buildings/facilities and permanent working capital for the acquisition of palay from small farmers and purchase and installation of various e-governance systems, among others.
Other purposes (19 percent) indicated in the proposed loans were the acquisition of heavy equipment and procurement of service vehicles.