MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said on Wednesday that it has given the government the go-ahead to seek bank offers for a planned global peso bond issue and dollar bond swap.
"There's no approval yet on the issuance of the peso bonds and debt swap. They just wanted a go-ahead for their issue of request for proposals, which we gave," said BSP Governor Amando Tetangco Jr.
Tetangco said the Finance Department has yet to give the proposed size of the peso bond offer, although Finance Secretary Cesar Purisima earlier disclosed the government was looking at a minimum of $500 million.
"The size will be determined after they talked with their potential underwriters," said Tetangco.
Officials have said that the government would issue global bonds with maturities of 5 to 10 years as part of efforts to manage its foreign currency exposure.
The bonds would be denominated in pesos, with settlement in US dollars.
The Philippines, Asia's largest sovereign issuer of foreign currency debt, relies heavily on local and foreign borrowings to bridge its fiscal gap, expected to widen to P325 billion, or 3.9% of economic output, this year from P298.6 billion in 2009.
The country's peso bond issue is expected to proceed within the second half of 2010.