Manila expects to price bond 'in days'

Manila expects to price bond 'in days'

Dow Jones, Bali, Indonesia

The Philippines expects to price its planned global bond offer
within a matter of days, the country's top finance official said
in an interview on Saturday on the sidelines of the Asia-Europe
Meeting.

"It should happen sometime soon...in days," Finance Secretary
Jose Isidro Camacho told Dow Jones Newswires. "In days, we expect
to hear from (the underwriters) about what the reception has
been. It's really just a question of getting feedback from
investors," he added.

The government has mandated Citigroup Global Markets, Deutsche
Bank Securities and JP Morgan as joint bookrunners for the
sovereign bond, which is likely to be worth at least $500 million
to cover the financing requirements of state utility National
Power Corp., or Napocor. The issue will likely have a maturity of
10.5 years.

In the Philippines, people close to the matter said last week
that the offering could reach as much as US$1 billion, to cover
both Napocor's requirements and part of the government's own
funding needs.

The government has a foreign financing requirement of $400
million over the rest of the year, down from the originally set
$900 million after the government raised extra funds from the
issuance of local retail treasury bonds.

Camacho declined to confirm the size of the Napocor bond,
saying it was "too early to say" how the government will raise
the $400 million foreign financing requirement. "We'll keep our
options open. There's no urgency at the moment" because of the
successful treasury bond issue.

The sovereign debt issue is in lieu of a $500 million global
bond that Napocor scrapped last week due to the high yield sought
by investors.

The market was asking for about 125 basis points over
Philippine sovereign notes, mainly because of the fear that
investors might get stuck with Napocor bonds, while the sovereign
is more liquid, Camacho said.

"We'd rather have the Republic of the Philippines do the issue
and lend it on internally to Napocor," he said. Last year, the
government lent Napocor $750 million due to poor demand for debt
issued directly by the company.

On the budget deficit, the secretary said he was confident the
country will meet its 2002 budget deficit target of 202 billion
pesos this year.

"We're certainly going at a pace where we should be able to
meet that comfortably," he said.

In the first five months, the deficit was 75.4 billion pesos,
lower than the target 88.6 billion pesos for the period.

That trend is likely to continue in June's deficit figures -
which haven't yet been released - due to rising customs receipts
and tighter expenditures in the month, Camacho said. "The June
numbers are looking good," he said

Last year, the government's budget deficit hit a record high
of 212.7 billion pesos.