MANILA, Philippines – (UPDATE 2) The Philippines will likely raise as much as $1.5 billion from a 10-year dollar bond offer it launched on Wednesday with brisk demand for the first offshore sovereign issue in Asia this year, bankers said.

That means the Southeast Asian nation will fully cover its overseas borrowing requirements this year and the strong orders could pave the way for other sovereigns in the region to follow with debt offerings.

Indonesia and South Korea are likely to offer bonds later this year with Malaysia also expected to tap international debt markets.

Bond markets expect Manila to sell its benchmark June 2019 bond at around 8.5-8.75 percent yield.

Official price guidance is expected to be issued when markets open for trading in New York.

"It seems like a good issue, and demand is pretty good," said Benedicto Jose Arcinas, vice president and treasurer at Export & Industry Bank in Manila. "I think they can offer $1.5 billion given the demand."

"We ourselves put in a larger bid than usual," Arcinas said.

The indicative yield quoted by the market offered a "decent premium" over the existing Philippine 2019 bond, a debt trader from a foreign bank in Manila said.

Yields on the Philippines' 10-year bonds, with a coupon rate of 9.875 percent and due in January 2019, were steady at 8.4 percent in the secondary market, one trader said.

The Philippines has said it wants to cover much of its 2009 overseas commercial borrowing needs in the first quarter.

"We have already launched the offer," National Treasurer Roberto Tan told Reuters.

He gave no details on pricing.

A source close to the deal said the offer could be about $1.0 billion, but Tan said the decision on the offer size would depend on market appetite.

Analysts have said Manila could be looking to raise funds to refinance sovereign bonds worth about $935 million that mature in March.

The offer is being managed by HSBC, Credit Suisse and Deutsche Bank.

It is the third major issue of offshore debt so far this year, but the first from Asia.

Colombia and Brazil each sold $1.0 billion of 10-year global bonds on Tuesday. Both Latin American issuers tapped the 10-year sector and in that sense Manila is following in their footsteps after both deals went smoothly.

"They should try and tap the belly of the curve first before going to the longer maturities just in order to gauge the market appetite," said Vijay Chander, head of credit strategy at Standard Chartered Bank referring to the 10-year tenor.

Investor interest in the Philippines, one of Asia's largest sovereign debt issuers, remains high despite general risk aversion on emerging markets after Manila licked a fiscal crisis in 2004 by raising revenues through a sales tax reform.

Manila also plans to borrow $1.1 billion in official development assistance loans this year.

It aims to raise $8.2 billion in the domestic debt market to help cover increased spending needs and fund a budget deficit seen widening to P102 billion ($2.2 billion) from as much as P75 billion in 2008.