MANILA - The national government has paid in full its outstanding P300 billion provisional advances to the Bangko Sentral ng Pilipinas on Friday, earlier than the June 11 maturity date, the Department of Finance said.
This is in line with Finance Secretary Carlos Dominguez III's goal of unwinding liquidity support from the BSP before the start of the next administration, the DOF said in a statement.
President Rodrigo Duterte and his cabinet will step down on June 30.
"The early repayment was made possible by the sooner than expected return of the economy to its pre-pandemic strength," the DOF said.
The country's gross domestic product (GDP) expanded by 8.3 percent in the first quarter, making the Philippines the fastest growing economy in the ASEAN region for the period.
Provisional advance is a measure under the Republic Act (RA) No. 7653 or The New Central Bank Act which allows the BSP to extend short term financing to the government of up to 20 percent of average annual income in the past 3 years, DOF said.
"The advance payment of the national government's P300-billion provisional advances from the BSP underscores the continued strong fiscal position of the Duterte administration despite the financial challenges from the pandemic and, later, the Russia-Ukraine conflict," Dominguez said.
"Its solid macroeconomic fundamentals--made even stronger by the game-changing reforms carried out by President Duterte during the COVID-19 crisis to further liberalize the economy and attract investors--will return the Philippines soon enough to its pre-pandemic path of rapid and inclusive growth," he added.
The advances gave the country access to cash to deliver large fiscal response and recovery measures, the DOF said.
As a sign of economic recovery, the volume of provisional advances was reduced to P300 billion in January from P540 billion in 2021, the DOF said.
Aside from the BSP provisional advances, the Philippines also has over P12 trillion in debt which pushed the country's debt-to-GDP ratio to 63.5 percent in March.
An analyst has said the current administration has done a generally good job in keeping the economy afloat despite the headwinds such as the COVID-19 pandemic and the impact of Russia's invasion of Ukraine.
The administration also passed key reforms that are meant to attract foreign investors which will benefit the country in the years to come.