MANILA - The Bangko Sentral ng Pilipinas (BSP) said on Friday it has eased accounting rules for banks and financial institutions participating in debt swaps of state-owned and -controlled firms, a move expected to boost investor interest in the debt exchange deals.

The new guidelines came weeks after the BSP approved state agency PSALM's plan to launch a $600 million debt exchange offer this year, on top of a proposal to issue $600 million in new dollar bonds.

PSALM, or the Power Sector Assets and Liabilities Management, oversees the debt and borrowings of Philippine power producer National Power Corp.

Under the new guidelines, state firms' debt regarded as held-to-maturity (HTM) under banks' books would be exempt from a so-called tainting provision if the institution takes part in a debt swap offer.

The tainting provision requires banks to reclassify their entire HTM portfolio into the available-for-sale category once they take out more than 1% of the debt papers in the HTM category.

"Under the said guidelines, securities booked under the held-to-maturity category that are offered and accepted in the exchange shall be exempted from the tainting provision provided that securities rejected in the exchange shall be continue to be booked under the said category," the BSP said in a statement.

The BSP previously exempted from the tainting rule the national government's domestic and global bonds covered by debt swaps in February and September 2006.