Government to issue global bonds early next year

MANILA, Philippines - The government is looking at issuing global bonds again as early as January next year even as it already sold $3.25 billion worth of dollar-denominated bonds this year, a ranking Finance official said.

However, nothing is final yet said Rosalia de Leon, office-in-charge of the Department of Finance’s International Finance Group.

“We may follow the same strategy unless there is something adverse,” said De Leon, referring to the government’s sale of $1.5 billion in dollar-denominated bonds in January this year.

However, De Leon said the government has not firmed up any amount for next year’s issuance if it pushes through.

According to next year’s program, the government is looking at borrowing $2 billion from foreign commercial creditors next year and roughly $1.8 billion from multilateral lenders or a total of $3.8 billion.

The rest of the financing requirements amounting to P475.2 billion for 2010 would come from domestic sources. This would amount to P475.2 billion or roughly $9 billion.

The emerging borrowing mix for 2010, meanwhile, is that 72 percent would come from domestic sources and 28 percent would come from foreign lenders.

This year, the government has so far raised $3.25 billion from foreign commercial creditors after successfully selling $1.5 billion in dollar-denominated bonds last January, $750 million in July and another $1 billion in October.

The government borrows from local and foreign sources to finance its budgetary requirements.

The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s macroeconomic assumptions, approved a wider deficit of P233.4 billion for 2010 from the previous program of P208 billion.

The DBCC earlier announced that the economy may grow anywhere from 2.6 percent to 3.6 percent in 2010, higher than the revised projected growth range for this year of 0.8 percent to 1.8 percent.

With gross domestic product (GDP) projected at a range of 2.6 percent to 3.6 percent for 2010, the government has set a budget of P1.541 trillion for next year.

This is P115 billion or eight percent higher than the 2009 budget of P1.426 trillion and is consistent with the goal of reducing the budget deficit to 2.8 percent of GDP from 3.2 percent of GDP in 2009, according to data from DBCC.