BSP poised to lend more to NG

Bangko Sentral ng Pilipinas is poised to lend more to the government, helping to boost state funding to counter the impact of the coronavirus pandemic, Governor Benjamin Diokno said on Monday.

The comments come days after President Rodrigo Duterte on Friday enacted a measure granting 165.5 billion pesos ($ 3.4 billion) for pandemic relief.

The law allows BSP, which already lends some money to the government, to grant additional credit worth up to 10% of average government income in the last three years. That equates to about 282 billion pesos, Diokno said.

When asked if the central bank is willing to lend more to the government, Diokno replied: “Yes, of course.”

The government proposed a higher limit to allow it to take advantage of the central bank’s facility “to fund the requirements against COVID-19 and seek a speedy recovery,” Treasurer Rosalía de León said Monday in a chat message to journalists. The funds are “adequately covered by savings from debt service and additional income,” he said.