Govt to pay BSP P300 billion

THE government will pay in advance the P300-billion bridge financing extended to it by the Bangko Sentral ng Pilipinas (BSP) in January 2022.

"The national government will fully settle these loans tomorrow, 20 May 2022, ahead of the maturity schedule of 11 June 2022," BSP Governor Benjamin Diokno said in a virtual briefing on Thursday.

The provisional advance the BSP gave to the national government last January was lower compared to the P540 billion the former had lent to the latter several times in 2020 and 2021 as part of its pandemic-induced interventions.

The BSP is mandated by its charter, Republic Act 7653, or the "New Central Bank Act," to extend a liquidity boost to the national government at an amount that is equivalent to 20 percent of the latter's average revenues in recent years.

The first of these during the pandemic was the P300 billion made through a reverse repurchase or RRP agreement in March 2020. Under the deal, the BSP will buy P300-billion worth of government securities, which is redeemable for three months but can be extended up to six months.

This was followed by three P540-billion provisional advances until 2021.

The cash provisions were to ensure funding for the government's pandemic-related expenses.

Source: TheManila Times