Sunday, March 13, 2011

Japan disaster could derail Philippines' Samurai offer

MANILA, Philippines - The government's planned Samurai bond sale has come under a cloud as Japan -- which is being asked to provide a guarantee -- seeks to recover from a devastating earthquake and tsunami.

"We’ll have to get JBIC’s (Japan Bank for International Cooperation) position," Finance Undersecretary Rosalia V. de Leon said in a text message during the weekend when asked if the issue would still push through.

The government is waiting for JBIC’s response to a request that it guarantee Samurai bonds -- yen-denominated debt papers sold in Japan by foreign borrowers -- with tenor of at least 15 years.

JBIC -- the international arm of state-owned Japan Finance Corp. -- had guaranteed 10-year Samurai notes that Manila sold in February last year. The Philippines raised $1.1 billion from that sale.

National Treasurer Roberto B. Tan, in a separate text message, said JBIC had not committed to a date as to when it would respond to the government’s request.

"There was no timeline set. We are, however, keeping in touch with them", he said.

Finance Secretary Cesar V. Purisima recently said he had secured the support of Japan’s Ministry of Finance for a Samurai offering. He said the government was looking to raise "at least $500 million ... during the first half."

Ms. de Leon said the government would continue to tap the Japanese debt market for financing despite the disaster. "Yes," she replied when asked if Samurais were still part of the P764.54-billion borrowing plan for 2011.

The government borrows from both the international and local markets to finance its budget deficit, programmed to hit P290 billion this year, as well as to repay existing debts.

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