RP should complete forex borrowings before polls

Bangko Sentral ng Pilipinas Governor Rafael Buenaventura urged the government yesterday to complete its remaining $680 foreign borrowings before the May 10 national elections.

"They should get it out of the way before the elections. They will have to borrow anyway," Buenaventura told reporters.

The Philippines, Asia’s largest sovereign debt issuer outside of Japan, is still considering when to go back to the global bond market to raise part or all of its remaining $680 million in external financing requirements.

"If it is favorable to issue now, then we would do it soon. If not, then we will do it before the elections. It would depend on the market," Finance Secretary Juanita Amatong was quoted as saying earlier this week.

Last Friday, the government raised $120 million from the sale of bonds due in 2011. It also swapped $1.18 billion worth of new seven-year bonds with old, shorter term and more expensive borrowings for the government.

The government’s fresh borrowing brought to $1.17 billion the amount it raised so far from the foreign debt market for its 2004 needs. It borrowed $1.05 billion in late 2003.

Officials have said Manila needed to raise a total $1.85 billion in foreign financing this year to fund its budget deficit.

Yields on its foreign and domestic debt have been under pressure from political uncertainty leading up to general elections on May 10 and from the battered peso’s fall to record lows.