RP sells US$500m global bonds

RP sells US$500m global bonds

MANILA: The Philippines said on Thursday it sold US$500 million in 11-year global bonds to finance government operations.

The issue, which matures in March 2015, was priced to offer investors a yield of 9.0 percent. HSBC, Credit Suisse First Boston and UBS sold the securities.

Standard and Poor's Ratings Services has assigned a BB debt rating on the bond issue.

It said the Philippines had adequate external liquidity, with total debt servicing projected at 37 percent of current account receipts this year -- similar to that of countries at a similar stage of development.

However, it said there was major concern over the budget deficit and growing dependence on foreign debt. The Philippines is the second largest Asian foreign borrower in the international capital markets, next only to Japan.

The government's remaining external financing requirement for this year stands at about $680 million. Standard and Poor's said Manila had to rely on the international markets because of its narrow tax base and shallow capital markets.

The Philippines has set a budget deficit ceiling of 197.8 billion pesos equal to 4.2 percent of gross domestic product this year. -- AFP