WSJ:UPDATE: Philippines Plans $1.5 Bln Peso, Dollar Bond Sale
-- May sell $1 billion in global peso bonds, $500 million in dollar bonds for local investors
-- Sale primarily for debt management purposes
-- Sale depends on conditions such as whether it offers reduced borrowing cost
-- No plan to sell bonds in Australia
(Adds dollar bond amount in the second paragraph, conditions of sale in the fifth paragraph, overall debt plan in the sixth and seventh paragraphs, central bank preference for a domestic sale in the eighth paragraph, decision against Australia sale in the ninth and 10th paragraphs, and background in the final paragraph.)
By Cris Larano
MANILA--The Philippine government is planning to sell up to $1.5 billion worth of onshore and offshore bonds, primarily for debt management purposes, a person familiar with the matter told Dow Jones Newswires Thursday.
The sale may begin soon and could include $1 billion worth of peso-denominated global bonds, and $500 million in U.S. dollar-denominated bonds for domestic investors, the person said.
Finance Secretary Cesar Purisima told reporters after a Senate hearing on a proposed tax measure Thursday that a bond sale plan is awaiting clearance from the Office of the President.
"It's for liability management," Mr. Purisima said, without providing details such as tranches, maturities or time frame.
He said the government wants to minimize foreign borrowing and will only pursue this sale if it could lengthen maturities, spread out maturities, reduce foreign exchange risk or reduce borrowing cost.
The government's 2012 borrowing plan involves $11.9 billion sourced domestically and $4.0 billion from abroad--$2.25 billion of which will be from international commercial sources. The government has already raised $1.5 billion through selling global bonds.
Under the proposed budget for 2013, the government will raise $4.5 billion overseas and $13.5 billion domestically.
But instead of borrowing from overseas, Bangko Sentral ng Pilipinas has urged the government to sell bonds domestically and use the proceeds to buy its dollars. The central bank's gross international reserves reached a record $80.73 billion at the end of August.
Last week, Mr. Purisima met investors in Sydney and Melbourne as part of a nondeal roadshow, but said the government doesn't plan to sell bonds in Australia.
"There's a third-currency risk" in selling Australian dollar-denominated bonds, he told reporters Thursday. "It makes our liability management more complicated."
The government has borrowed heavily via the international debt market in recent years, mainly by selling dollar-denominated bonds. It has also sold bonds in yen and the euro. Its last global peso bond sale was in January last year when it raised $1.25 billion through a 25-year bond.
