PH raises record P188-B from retail peso bonds

Posted at 10/19/12 2:59 PM

MANILA - The Philippines raised a record P188 billion ($4.5 billion)from its second retail treasury bond issue of this year, a senior official said on Friday, giving the government greater borrowing flexibility for the rest of the year and into 2013. 

The Treasury cut short the 10-day selling period, which had been set to end on Oct. 22, due to the "overwhelming demand", National Treasurer Roberto Tan said. 

"With this transaction, we will be in a comfortable cash position," Tan told Reuters. 

The 6.125 percent 2037 retail bonds pay quarterly interest, and have a higher than the 5.95 percent for the 25-year T-bond, based on PDST-R1, in the secondary market. 

The government had raised 180 billion pesos of 2027 and 2032 retail bonds in February, a record high at the time.   The Southeast Asian country relies heavily on local and foreign borrowing to fund its budget deficit. The deficit is expected to rise to 2.6 percent of GDP this year, or P279 billion, from 2.0 percent in 2011.     

Next year, the Philippines plans to issue $3 billion worth of global bonds, up slightly from this year's $2.25 billion.  

The target for local debt sales for 2013 was set at 635.4 billion pesos, nearly 9 percent more than planned issues this year and 12 percent higher than a previously set borrowing plan for next year, as Manila relies more on domestic sources for its funding needs. 

Money parked with the central bank's short-term special deposit account (SDA) window, an indicator of domestic liquidity, totaled a record $1.87 trillion in the week ending Sept. 14