Purisima sees additional foreign borrowings

MANILA, Philippines -  The Philippines is assessing market conditions and may possibly borrow again from the foreign debt market in the first half of the year, Finance Secretary Cesar Purisima said yesterday.

 “We’re looking at market opportunities,” he said.

He did not provide details on the different options the government is looking at for the remaining foreign commercial borrowing requirement of $500 million for the year but noted that the DOF’s International Finance Group (IFG) is studying what would be best for the government.

Purisima said the Aquino administration wants to be opportunistic with its borrowing activities, with the aim of lengthening maturities.

 “It’s possible,” Purisima said when asked if the additional fund-raising program would be done in the first half of the year.

In an earlier interview, National Treasurer Roberto Tan said there are different options available in the market.

These include issuing yet another peso-denominated global bond or a dollar-denominated bond.

At the same time, Tan has said the issuance of yen-denominated or so-called Samurai bonds still remains an option.

The additional $500 million will cover for an expected shortfall in official development assistance loans for the year.

If the Aquino administration proceeds with the additional $500 million debt issue, total foreign bond sales would increase to $3.25 billion or above the original program of $2.5 billion for the year.

Including official development assistance (ODA) loans, however, total overseas borrowing would still stay within the program of $4.5 billion for 2011.

In January, the Philippines raised $1.25 billion from the sale of peso-denominated bonds and another $1.5 billion from a global bond sale in March.

The government borrows from the local and overseas debt market to plug its budget deficit which is projected to hit roughly P300 billion this year or 3.2 percent of gross domestic product (GDP) from P314.4 billion last year or 3.7 percent of GDP.