Borrowing more from the Bangko Sentral ng Pilipinas (BSP) to boost government financing is not needed for now as the government is presently banking on its various fiscal programs, according to the Department of Finance (DOF).
“At this point in time we don’t see any need to do so,” Finance Secretary Carlos Dominguez said recently.
Dominguez said the government currently has a P540-billion provisional advance from the central bank, which the BSP’s policy-making Monetary Board (MB) approved last October.
This is on top of the P300 billion that the BSP extended to the national government last March through a repurchase deal, which has been fully redeemed.
Under this deal, the central bank bought government securities, which the Bureau of the Treasury (BTr) has to redeem within three months, although there was a clause in the agreement that payment period may be extended for another three months.
The central bank’s Charter allows it to extend cash advance to the national government, but the amount should not exceed the government’s average revenues in the last three years, which, to date, is PHP540 billion.
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