Gov't eyes retail bond sale in first quarter

The government may sell retail Treasury bonds to Filipino workers overseas this quarter as it ramps up borrowing to plug a gaping budget gap. "Maybe in the first quarter... We still have to fix some things," a Finance department official said on Wednesday when asked about the schedule of the bond sale. The official, who requested anonymity, said the issue would not swamp the market even if the government decides to proceed with a Samurai bond sale next month. "These are intended for different markets," the official said in Filipino. The Samurai bonds will be sold to the Japanese market while the RTBs are targeted at Filipinos living and working abroad. Reports earlier said the retail bonds may be denominated in the dollar or euro, but the source said this would still be discussed. Sought for confirmation of the sale schedule, National Treasurer Roberto B. Tan said in a text message the government wanted the retail bond sale "done earlier than later." He did not elaborate. Reports have quoted Tan as saying the government might sell three- and five-year debt to Filipino workers abroad. The government is resorting to borrowings to support its spending program and cover a budget shortfall that is expected to hit P293 billion this year. It plans to raise $2.5 billion overseas and $1.8 billion through official development assistance this year. Early this month, the Philippines raised $1.5 billion from the sale of dollar-denominated bonds, making it the first Asian sovereign debt issuer this year. Another source of funding being eyed by the government is the sale of at least $500 million worth of Samurai or yen-denominated bonds. Finance Secretary Margarito B. Teves said the government might raise the offer to as much as $1 billion. "It will depend on the cash flow and market appetite," he told reporters on Wednesday. The yen bond, which was originally slated for last year, was moved to this year after the government and JBIC failed reach a final deal on guarantee costs. Early this month, however, Finance department officials said the government and JBIC have agreed on the guarantee terms but declined to be more specific. Teves said on Tuesday the Philippines might float the Samurai bonds in the third week of February after a road show in Tokyo. — Alexis Douglas B. Romero, BusinessWorld