DOF postpones anew no-deal roadshow

Finance officials decided yesterday to postpone a scheduled no-deal roadshow for the second time, saying they would meet with foreign investors after September instead.

The roadshow was first postponed after the outbreak of political turmoil resulting from the admission of President Arroyo that she talked to an election official during the counting of the election returns in 2004.

This time, officials said they preferred to wait until there were clearer indications on how the Supreme Court (SC) would rule on the petitions against the expanded value-added tax (EVAT) which had renewed optimism on the country’s economic prospects.

National Treasurer Omar Cruz told reporters yesterday that the July roadshow would probably be held sometime after September, after the summer holidays in Europe and the US.

"We were aiming for the small window before investors go on summer vacation in July and August but it looks like we will have to look at a later schedule," Cruz said.

Cruz admitted that the SC decision to restrain the implementation of the VAT was the biggest factor in the second postponement and finance officials wanted to wait for clearer indications of later developments before facing investors again.

According to Cruz, the price on Philippine bonds took a beating over the weekend as soon as investors found out about the SC order, dropping by four percentage points in New York.

"The timing was particularly bad because by the time the news came out, Asian markets are already closed and investors in New York had no cue to pick up from," Cruz said. "That’s why the drop was huge."

The roadshow was intended as a no-deal affair but the Arroyo administration would have even less time to drum up interests among investors for when it finally returns to the credit market to raise the remaining $800 million of its foreign borrowing requirements this year.

"That leaves us with only one quarter to work with," Cruz said, indicating that the government did not have any intentions of biting the bullet and just borrowing at high interest rates.

"That’s not in my language," he said.

According to Cruz, credit rating agencies are also watching the developments at the SC, especially since most of them have just upgraded their credit outlook from "negative" to "stable."

"It’s really too bad, considering that we are looking at good fiscal numbers right now," Cruz said, adding that the emerging June fiscal numbers indicate a small budget surplus for the second time this year.

The no-deal road show was originally set on June 21 but the DOF decided to postpone it in the wake of the political controversies besetting the Arroyo administration.