PH may issue onshore global bonds this year

Reuters

Posted at Jan 07 2013 04:40 PM | Updated as of Jan 08 2013 12:40 AM

MANILA - The Philippines is looking to issue U.S. dollar denominated bonds to local investors this year after a successful offer in 2012, to create more local demand for dollars and help meet its domestic funding needs, a senior official said on Monday.

"We are contemplating whether onshore dollar bonds can be one of the structures that can be considered for our domestic financing plan," National Treasurer Rosalia De Leon said.

The government has set a borrowing mix of 80-20 in favor of domestic sources this year. The domestic component of its borrowing program has been gradually increasing, consistent with its aim to cut its reliance on foreign debt.

First Metro Investment Corp, which is usually tapped by the government to handle its bond issues, said an onshore dollar bond issue of up to $1 billion can easily be done in the first quarter.

"The market can absorb $1 billion," FMIC President Roberto Juanchito Dispo told reporters. "There are $27 billion in FCDUs (Foreign Currency Deposit Units) so banks are looking for outlets."

"We are suggesting tenors of 10 and 15 years," Dispo said.

In November, the Philippines raised $500 million from the sale of 2032 U.S. dollar-denominated bonds to local investors. The issue attracted strong demand, with total bids exceeding the issue size by more than three times. 

The Southeast Asian economy, one of the most prolific global bond issuers among emerging economies, wants to cut its dependence on foreign borrowing by pursuing debt buybacks, swaps and innovative deals such as local-currency denominated debt to better manage its debt load and win its first investment grade rating.