Foreign banks big buyers of Philippine debt paper

Foreign banks were among the top direct buyers of Philippine debt paper, based on the auctions held in 2011.

The Bureau of the Treasury (BTr) named Deutsche Bank, Citibank NA, and Hong Kong and Shanghai Bank Inc. as the three best government securities eligible dealers (GSEDs).

The BTr said Wednesday in a statement the banks were evaluated only in terms of their performance in the domestic primary market of government securities, referring to its own auction as opposed to the secondary market where debt paper is traded.

The BTr held weekly auctions, alternately for Treasury bills and Treasury bonds, throughout the year except for the second half of this month.

Other banks cited—in descending ranking—were Metropolitan Bank & Trust Co., Bank of the Philippine Islands, Standard Chartered Bank, Rizal Commercial Banking Corp., BDO Unibank Inc., and Security Bank & Trust Co.

According to the BTr, there are currently 40 GSEDs, including banks and nonbanks with or without quasi-banking licenses such as insurance companies.

There was close competition for best performance among the GSEDs, with the ratings for all dealers—including those that were not cited—observed to be closely bunched, the BTr said.

The top three GSEDs are among the eight banks that the government has tapped to help raise funds from abroad next year as it eyes a possible global bond float as early as January.

Finance officials have said that the government plans to borrow a total of $4 billion from foreign lenders next year, of which $2.25 billion will be commercial borrowings while the remainder will come from official development assistance.

Monetary authorities gave the BTr flexibility in the planned bond floats, meaning that in terms of tenor, the agency could issue debt paper with a life of as long as 25 years.

Last January, the BTr was able to raise $1.25 billion from the issuance of global bonds.

Last week, Finance Undersecretary Rosalia V. de Leon said that whether a bond float will push through next month would depend on the receptiveness of the markets amid continuing worries about debt and fiscal problems in the United States and Europe.—Ronnel W. Domingo