Government in talks with JBIC for possible Samurai bond issue

MANILA, Philippines -  The Aquino administration is in discussions with the Japan Bank for International Cooperation (JBIC) to guarantee another possible Samurai bonds issue, Finance Secretary Cesar Purisima said yesterday.

 “Our team will continue to discuss these with JBIC, the banks and others,” Purisima told reporters yesterday on the sidelines of the 109th founding anniversary of the Bureau of Customs (BOC).

Following the economic team’s meeting with the Japanese business community in Tokyo last week, Purisima said Japanese investors expressed strong interest in another yen-denominated issuance by the Philippines.

“I’ve always said we will always continue to tap our existing sources to keep it light but without losing sight of our goals,” he said.

He also said that the planned Samurai bonds, which may happen in the first half of the year, may be longer than 10 years.

Aside from yen-denominated bonds, Purisima said the Aquino administration is actively studying all its fund raising options including the issuance of peso-denominated global bonds.

The government still needs to raise $1 billion from the foreign debt market this year, National Treasurer Roberto Tan said.

He said this may not necessarily be fulfilled through the issuance of global bonds but by tapping the domestic debt market as well.

“We want to utilize our domestic sources,” Tan said.

Last year, the government of then President Arroyo raised ¥100 billion or $1.1 billion from the sale of Samurai bonds to plug its widening budget deficit.

The 10-year Samurai notes fetched a coupon rate of 2.32 percent and is 95 percent guaranteed by JBIC.

Last year’s Samurai bond issue was the government’s first yen-denominated bond sale in nine years.

Prior to this, the Philippines tapped the Japanese Capital Market in 2001 with the issuance of Shibosai bonds, also a form of Samurai bonds, amounting to Japanese ¥50 billion.

Government officials were in Tokyo last week for the 29th Joint Committee Meeting of the Philippine Japan Economci Cooperation Committee Inc. (PhilJec).

Aside from Purisima, the officials present during the meeting included Trade Secretary Gregory Domingo, Energy Secretary Rene Almendras and Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo.

They met with very senior members and decision makers of the Japanese investment and business communities and encouraged them to take part in the positive growth momentum of the Philippines.