"The pricing right now is too high as the spread on eight-year Philippine papers is between 500 to 600 basis points," Buenaventura said, adding that "with such a wide spread, it would be better for the BSP to wait till next year when the spreads may come down."
The BSP, however, has started entertaining proposals from various international investment banks regarding the club loan.
With the current wide spreads, Buenaventura said, the BSP is no longer "in a hurry and would just rather wait for a better time."
The BSP’s planned club loan is only for a medium-term period of three to five years.
Buenaventura said it is not only the Philippine market which is currently experiencing such wide spreads on its sovereign debt instruments. "All emerging countries are experiencing the same high rates and wide spreads," he said.
The BSP chief said postponing the planned club loan until early next year is best for now since the strategy of the BSP has always been "to borrow when it is still not needed."
The BSP’s obligations are due next year and the BSP is only trying to test the market for good rates.
"A factor in the higher rates for the Philippine papers may be the current political uncertainty," Buenaventura said.
Once the impeachment trial is over, Buenaventura said "things would settle down and market would again assess the Philippines based on its fundamentals."