Government mulls options for $500-M foreign borrowing this year

MANILA, Philippines - The Philippines is studying options on how to fill its remaining foreign commercial borrowing requirement of $500 million for the year.

National Treasurer Roberto Tan said there are different options available in the market.

These include issuing yet another peso-denominated global bond or a dollar-denominated bond.

The Philippines may also reopen existing bonds in the market, he said. “It depends on market conditions,” Tan noted.

At the same time, Tan said the issuance of yen-denominated or so-called Samurai bonds still remains an option.

Tan said the government is just waiting word from Japanese authorities on the proposed debt sale. The government is asking the Japan Bank for International Cooperation (JBIC) to guarantee the issue.

The additional $500 million will cover for an expected shortfall in official development assistance loans for the year.

If the Aquino administration proceeds with the additional $500-million debt issue, total foreign bond sales would increase to $3.25 billion, or above the original program of $2.5 billion for the year.

Including ODA loans, however, total overseas borrowing would still stay within the program of $4.5 billion for 2011.

In January, the Philippines raised $1.25 billion from the sale of peso-denominated bonds and another $1.5 billion from a global bond sale in March.

The timing of the issuance of another $500 million has yet to be determined, Tan said.