MANILA – The national government is prepared to repay the PHP300 billion that the Bangko Sentral ng Pilipinas (BSP) extended through a repurchase agreement to help fund the coronavirus disease 2019 (Covid-19) response program.
Asked by a journalist if the government is ready to pay the funding agreement by Sept. 30, Finance Secretary Carlos Dominguez III said yes.
Last March, BSP’s policy-making Monetary Board (MB) authorized the central bank to purchase government securities from the Bureau of the Treasury (BTr) to support the national government’s programs in addressing the impact of the pandemic.
Under the deal, BTr has a maximum of six months to repay the debt securities.
The BSP Charter allows for this deal, provided that the tenor of the securities is three months and can be renewed for another three months.
Also, the number of securities that will be purchased should not exceed the government’s average revenues in the last three years.
“For prudential reasons, we interpret this to mean that it should be used only during extraordinary times — and these are obviously extraordinary times,” BSP Governor Benjamin Diokno earlier said.