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$5-B debt shelf secured for foreign bond issue

A debt shelf acts like a credit line with the balance reflecting the allowable amount of debt an issuer can float in a particular currency.

MANILA, Philippines - The Philippines secured an additional $5 billion in debt shelf from US authorities, sealing all the requirements for its first foreign bond issuance this year which can come anytime until June.

"Yes. We have a $5 billion shelf registration," National Treasurer Roberto Tan told The STAR in a text message late Monday.

A debt shelf acts like a credit line with the balance reflecting the allowable amount of debt an issuer can float in a particular currency.

The government has been waiting for the US Securities and Exchange Commission to grant it shelf registration as it plans to return to the offshore bond market this year.

The fresh amount will be added on top of an undisclosed remaining amount of authority for US debt securities.

Other regulatory approvals have already been secured. The central bank's Monetary Board gave its go-ahead in November last year, while President Aquino approved it last month.

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Despite this, Tan said the government would take its time on deciding when to issue global bonds again.

"Our decision to launch a transaction will be based on our assessment that an optimal window exists relative to market conditions," he pointed out.

"So far, we have not made any decision as to the timing of an issuance," Tan said.

The Aquino administration, which steps down in June, has initially programmed to float $750-million global bonds together with a bond swap worth $1.25 billion. 

Sought for comment, Jonathan Ravelas, chief market strategist at BDO Unibank Inc., said government may borrow abroad "within the first quarter."

"It could be in March before the next Fed meeting," Ravelas said in a text message.

"Given the market rates are still low, as a borrower, you want to take advantage of it," he added.

The US Federal Reserve will meet from March 15 to 16 to set policy. It left key rates steady this month after hiking them by 25 basis points in December.

The government will also hold the Philippine Business and Investment Forum in New York on March 3.

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