BSP okays $1.5-billion global bond float

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given the government the authority to issue $1.5 billion in global bonds, Finance Secretary Cesar Purisima said.

Fiscal authorities are already in discussion with banks for proposals and the timing of the debt sale which could happen in the coming weeks.

This developed as the government’s plan to borrow from the Japanese debt market may be put on hold following the devastating earthquake that struck the Asian country last week.

National Treasurer Roberto Tan said the government would wait for signals from Japanese authorities before it proceeds with its plan to sell Samurai bonds to Japanese investors.

“We defer to the process that the Japanese government will need,” Tan said.

The Aquino administration is looking into the possibility of issuing yen-denominated bonds in the first half of the year as one option for plugging its budget deficit but it is now studying the timing of the issuance following the tragedy that struck last week.

“How we respond to this matter will depend on the Japanese authorities,” he said.

The government is already in discussions with the Japan Bank for International Cooperation (JBIC) to guarantee the issuance.

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

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

If the government is unable to proceed with the Samurai bonds, Tan said it would look into other options.

“There’s always an alternative. We can also go domestic. There’s also the dollar and the euro,” Tan noted.

He said that if it’s advantageous to the market, the government could do a euro bond sale.

“But right now, it’s still a wait-and-see stance,” Tan said.

The government is eyeing a budget deficit of roughly P300 billion this year from the P314.4 billion incurred last year.