6 intl banks expected to handle govt's $1.5-B global bond float

At least six international banks are expected to handle the Philippine government’s planned sale of around $1.5 billion worth of global bonds, a government source said Thursday night. The banks include HSBC, Citibank, Deutsche Bank, Goldman Sachs, Union Bank of Switzerland, and J.P. Morgan. The source said they will handle the debt sale and advice the government on the exact timing of the issuance of the bonds. The Bangko Sentral ng Pilipinas has already given the government the authority to issue the bonds. In January, the Aquino administration raised $1.25 billion from an offer of global peso-denominated bonds. It was the country’s second issuance of global bonds following a successful launch in September last year. Finance Secretary Cesar Purisima had earlier said the government was considering various options to complete its funding requirements for 2011, including the issuance of yen-denominated bonds in the first half of the year. The Aquino administration is eyeing to issue 15- or 20-year, yen-denominated bonds, which would be guaranteed by the Japan Bank for International Cooperation (JBIC). Still, the Philippine government is waiting for signals from Japanese authorities to proceed with the sale of the bonds after a devastating earthquake and tsunami swiped a portion of Japan last week. The Philippines relies heavily on local and foreign borrowing to fund its budget deficit. In 2010, the government incurred a fiscal deficit of P314.4 billion or 3.7 percent of gross domestic product (GDP), below the P325-billion budget deficit ceiling set for the previous year. This year, the government expects the budget gap to narrow to roughly P300 billion or 3.2 percent of GDP. — JE, GMA News