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BSP lends another 540 billion yen loan to national government

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Metro Manila (CNN Philippines, July 15) – The central bank approved another line of credit in the amount of 540 billion euros requested by the Treasury Office.

Bangko Sentral ng Philippines Governor Benjamin Diokno said Thursday that the Monetary Board approved the new short-term loan to the national government last week. This is the fourth advance loan guaranteed by the government in the COVID-19 crisis, and it does not charge interest.

“We have just renewed aid to the government,” Diokno told reporters in a virtual briefing, referring to a loan of the same amount approved in January and maturing last month.

The new loan is intended to increase the liquidity available for the state’s response to the pandemic. Diokno said the most transmissible COVID-19 variants pose the greatest downside risk to economic recovery as another outbreak could trigger a return to lockdowns.

President Rodrigo Duterte has repeatedly lamented the lack of funds for emergency response measures as the pandemic continues. This forced the authorities to resort to additional borrowing, with outstanding debt reaching more than 11 trillion yen in May.

The BSP previously made a 300 billion yen loan to the Philippine government in March 2020, followed by another 540 billion yen in September last year.