Monetary Board OK's $1.2-B Global bonds

The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, approved in principle a $1.2-billion Global bond float of the National Government and the National Power Corp. (Napocor), BSP Gov. Rafael B. Buenaventura reported yesterday.

Buenaventura said the $1.2- billion Global Bond float consists of a $700-million issue by the Department of Finance and a $500-million issue by Napocor.

The BSP chief said the BSP will also tap the international capital market for a planned borrowing of anywhere from $300 million to $500 million which will be used to refinance the BSP's maturing obligations this year.

He said the BSP's planned borrowing will follow that of the DOF's offering.

"They (DOF) will be the first one to come up with the schedule, then we will just follow, tapping the international syndicated loan market," Buenaventura said.

Buenaventura is confident the planned borrowings of the National Government and Napocor will be warmly received by the international market.

He pointed out that the planned issuance is of "sufficient size that will provide liquidity," which means that it can be easily traded in the secondary market.

Sources said the government's plan to borrow this year is in line with its policy of relying mostly on foreign funds to finance its budget deficit this year instead of putting pressure on the domestic capital market.

Earlier, Finance Secretary Jose T. Pardo said the government will rely 61 percent on external borrowing and only 39 percent on domestic sources.

In an effort to keep local interest rates at affordable levels, government is recalibrating its borrowing program to increase even more its foreign borrowings.