PHL fails to launch planned debt swap

The government failed to launch a planned debt swap on Tuesday after it failed to comply with the requirements in time for the June 28 launch date. “We are still working on the documentation requirements," National Treasurer Roberto Tan said. Sources also said the unfulfilled requirement has not yet been approved by the Office of the President. The Bangko Sentral ng Pilipinas (BSP) had earlier issued a favorable opinion on the planned debt swap. The swap involves offering 10- and 20-year bonds in exchange for previously issued bonds that are about to mature. The government had earlier appointed the Land Bank of the Philippines and the Development Bank of the Philippines to handle the transaction, with the closing and settlement expected within the first two weeks of July. It has also tapped First Metro Investment Corp., BPI Capital Corp., SB Capital Investment Corp. and Citibank to help arrange the transaction. In December, government successfully awarded roughly P200 billion worth of new 2035 and 2020 bonds in a similar debt-swap agreement. Of the amount, government issued P30 billion worth of 2020 bonds and P170 billion worth of 2035 bonds. With the planned debt swap, the government is looking to finance a budget deficit that is expected to reach P290 billion this year, equivalent to 3.2 percent of the gross domestic product. —JMT/VS, GMA News