b. Contracting or Guaranteeing Foreign Loans

Power to Contract of Guarantee Foreign Loans (PHIL. CONST., art. VII, § 20)

The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board; and subject to such limitations as may be provided by law.

The Monetary Board shall, within 30 days from the end of every quarter of the calendar year, submit to Congress a complete report on loans to be contracted or guaranteed by the Government or government-owned or controlled corporations which would have the effect of increasing the foreign debt.

Contracting and Guaranteeing Foreign Loans; Requisites

• With the prior concurrence of the Monetary Board [1987 Constitution, Art. VII, Sec. 20]
• Subject to such limitations as may be provided by law [1987 Constitution, Art. VII, Sec. 20]
• Information on foreign loans obtained or guaranteed by the Government shall be made available to the public [1987 Constitution, Art. XII, Sec. 21]

Cf. R.A. No. 4860

Congress may provide guidelines for contracting or guaranteeing foreign loans, and have these rules enforced through the Monetary Board. But for Congress to grant prior approval is a totally different issue. At any rate, the present power, which was first introduced in the 1973 Constitution, was based on R.A. No. 4860 or the Foreign Loan Act. What used to be a statutory grant of power is now a constitutional grant which Congress cannot take away, but only regulate.

Role of Congress in such Foreign Loans

The President does not need prior approval by Congress:

• Because the Constitution places the power to check the President’s power on the Monetary Board;
• BUT Congress may provide guidelines and have them enforced through the Monetary Board