MANILA, Dec 22 (Reuters) - The Philippines plans to raise 135 billion Philippine pesos ($3 billion) through the sale of Treasury bills and bonds in the first quarter of next year, the Bureau of Treasury said, unchanged from October-December.
The Bureau of Treasury plans to sell 60 billion pesos worth of 91-day, 182-day and 364-day Treasury bills and 75 billion pesos of 7-, 10,- and 20-year Treasury bonds between January and March, it said in a notice to government security dealers.
It also raised 135 billion pesos in October-December to help finance the government’s budget deficit, which is on course to fall below its target of 2 percent of gross domestic product this year.
As much as 86 percent of the government’s borrowing requirement will be sourced from the domestic market next year. The balance of 14 percent will be raised externally, including up to $750 million in global bonds.
Last month, National Treasurer Rosalia de Leon said the Philippines is looking at tapping the offshore debt market early in 2015 for its deficit funding requirements, or a possible issue bonds for liability management purposes.
Manila’s global bond sale of up to $750 million was been approved by the Philippine central bank in principle in November, according to a government source who requested not to be named as he is not authorised to speak about the deal.
The approval paves the way for the country’s return to the overseas debt market early next year.
The central bank has also given the nod to a government plan to exchange up to $1.25 billion worth of foreign-currency denominated bonds for longer-dated securities to help it manage its obligations, the same source said.
The Philippines has a history of issuing sovereign bonds early in the year to get favourable borrowing terms and raise the bulk of its foreign debt needs before the markets become more volatile.
It wants to cut its dependence on foreign borrowing by pursuing debt buy-backs and swaps, and innovative deals such as global bonds denominated in local currency, a move praised by credit rating agencies.
On Dec. 12, Moody’s Investors Service raised the Philippines’ credit rating to two notches above investment grade - matching Standard & Poor’s rating - saying favourable prospects for strong economic growth remained.
$1 = 44.6050 Philippine pesos Editing by Eric Meijer