The Bangko Sentral ng Pilipinas, or BSP, on Sunday reported approving a total of $2.7 billion in external loans in the third quarter to fund infrastructure, agriculture, climate and social welfare projects while ensuring the debt level remains manageable.

The total loans represented four projects amounting to $1.95 billion and another project worth $0.75 billion.

"These borrowings will fund the national government's program on economic recovery, environmental protection and climate resilience, as well as projects for the transport and agricultural sectors," BSP said in a statement to the media.

As a precautionary measure, the national government and state-run agencies and financial institutions must submit to the Monetary Board their proposals for foreign loans under the rules of the 1987 Constitution and BSP's Letter of Instructions 158 dated 21 January 1974.

"The BSP promotes the judicious use of the resources and ensures that external debt requirements are at manageable levels, to support external debt sustainability," the central bank explained.

No debt crunch

Finance Secretary Benjamin Diokno said the government aims to reduce the country's debt-to-GDP ratio to less than 60 percent over the medium term.

The International Monetary Fund or IMF deemed that goal's timeline appropriate, given the persisting global economic slowdown post-pandemic.

"Fiscal consolidation as envisaged under the Medium-Term Fiscal Framework is on track, reflecting a strong revenue performance and lower current spending, while maintaining infrastructure outlays at or above 5 percent of GDP," IMF officer S. Jayanath Peiris said after the global institution's Article IV Economic Consultation from 21 September to 3 October this year.