Business World
THE PHILIPPINES could return to the foreign bond market in the first quarter of 2011 with a global peso bond issue as it studies more debt swaps to reduce its foreign exchange risk and stretch maturities.
National Treasurer Roberto B. Tan said the government was studying options to pay some of its foreign debt early, including a swap of existing dollar debt for local currency bonds to help ease the upward pressure on the peso.
"We would like to further develop our global peso bond market so we avoid one major risk which is foreign exchange risk," Mr. Tan told reporters, adding that the government was looking at a 10-year or 20-year benchmark-size issue.
"It might not be feasible for us to get good pricing for very long tenors, so maybe more than 10 years, but not 25 years," Mr. Tan said. He added more than five banks had offered to underwrite the global peso bond sale.
The Philippines, Asia’s largest sovereign issuer of foreign currency debt, was the first to issue local currency global bonds in Asia when it sold $1 billion of a 2021 global peso bond in September. In the same month, it completed a $3-billion foreign debt swap and sold $200 million of new 10-year dollar bonds.
The government of President Benigno S. C. Aquino III, who took office on June 30, wants to shift to more peso-denominated debt to better manage its borrowings and cut currency exposure.
"There are no plans to issue dollars bonds right now," Mr. Tan said. -- Reuters
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