PH to tap int’l market for $1-B bond salePhilippine Daily Inquirer
The Philippines will go back to the international capital market in 2014 to help fund the government’s expenditure requirements. The country hopes to sell $1 billion in sovereign bonds abroad.
According to National Treasurer Rosalia de Leon, the amount will be on top of the $1.2 billion in official development assistance (ODA) that the government plans to secure from multilateral development institutions next year.
Total foreign borrowings programmed for next year now stands at $2.2 billion.
“We normally want to open the door [for foreign commercial borrowings] early in a year,” De Leon said, referring to the intention of the Bureau of the Treasury to schedule the $1-billion bond sale in the international market in January or February next year.
“But we also have to evaluate market appetite,” she told reporters at the sidelines of an economic forum organized by Bloomberg held yesterday in Makati City.
In 2013, the government decided not to sell bonds in the foreign market, as it hoped to temper the appreciation of the peso and rein in the enormous liquidity now circulating in the country’s financial system.
But the government now is under no pressure to temper the local currency because the peso has since weakened and is expected to stay on the depreciation path.
After hovering in the 41:$1 territory earlier this year, the peso now lingers at 43 against the greenback.
Although the government plans to go back to the international capital market next year, it will still favor the domestic market more in terms of borrowing, De Leon said. This means that funds to be raised locally, especially through the sale of Treasury bills and bonds, will make up the bulk of the government’s funding requirements for 2014. Michelle V. Remo