Gov't Plans to Raise $2.5 Billion in Bond, Debt Issues in 2011

Article excerpt

The government plans to raise around $2.5 billion through bond and debt issuance overseas in 2011, down from the $4.1 billion planned for this year, Finance Secretary Cesar Purisima said Wednesday.

In his presentation during the government's midyear economic briefing, Purisima outlined next year's foreign financing program, which totals $4.5 billion, lower than the $5.5 billion projected for this year.

He said project financing will account for $700 million in 2011 compared with $500 million this year; multi-purpose foreign loans will increase to $1.3 billion from $900 million; and bond issuance and other commercial borrowings will fall to $2.5 billion from $4.1 billion this year.

The Philippines, one of Asia's most aggressive sovereign borrowers, has raised a total of $3.6 billion from the international bond market earlier this year through the issuance of global and samurai bonds. It is planning to issue dollar and peso-denominated global bond later this year.

The government, which closed on Tuesday a retail bond offer that raised P97 billion , is also studying a peso global bond issue, and a dollar bond sale along with a debt exchange program to raise as much as $1.5 billion before the end of the year.

''That is the financing plan for 2010,'' National Treasurer RobertoTan told Reuters.

''However, that can change, depending on cash projections after the retail treasury bonds.''

The retail bond sale was aimed at refinancing maturing debt and providing additional supply to a highly liquid market, with banks flush with cash due to slow loan take up.

The retail bond had attracted orders of P230 billion by Monday evening, but the government declined a request from underwriters to increase the issue size. …