MANILA - The Philippines, one of Asia's most prolific foreign debt issuers, is likely to cut planned overseas bond issues next year, with the government keen to rely more on the domestic debt market for its borrowing needs.
The Southeast Asian economy wants to reduce dependence on foreign borrowing by pursuing debt swaps and innovative deals such as local currency-denominated global bonds, to better manage its debt load and win investment grade rating.
Next year's planned global bond sales will "most likely" be cut to $1.5 billion to $2 billion from an original programme of $3 billion, National Treasurer Rosalia De Leon told reporters.
The government also plans to regularly issue U.S. dollar-denominated bonds to local investors, as it seeks "to develop new funding sources in the local market," De Leon said.
Fresh from an oversubscribed sale of $750 million global peso notes early this month, the government will sell as much as $500 million in dollar bonds to the domestic market at auction on Nov. 28, partly to help create dollar demand and contain the peso's strength.
The peso is Asia's best performing currency so far this year, up nearly 7 percent against the U.S. dollar on strong foreign inflows into Philippine stocks and bonds with forecasts of sustained strong domestic growth. A Nov. 9 Reuters poll showed further currency gains were expected.
Before this month's peso global notes, public debt to GDP stood at 42 percent, down sharply from 68 percent nearly a decade ago. Its interest payments now account for around a fifth of state spending from close to a third in 2005.