| WASHINGTON, April 10
WASHINGTON, April 10 The Philippines will
conduct another foreign debt swap similar to one in January once
market conditions are right, the country's finance minister said
"We just did one earlier this year, and as you know, the
Philippines is always opportunistic and when market opportunity
is there, we will do one," Finance Secretary Cesar Purisima told
reporters on the sidelines of the IMF/World Bank meetings in
Purisima also said the Philippines was talking to the World
Bank about issuing "catastrophe bonds" that would help it deal
better with the effects of extreme weather events such as
Super Typhoon Haiyan, which hit in November.
"Given that the Philippines is among the countries that are
hit by typhoons on a regular basis and given as we're seeing
across the globe the intensity and frequency of climate extremes
we're looking at new types of financial instruments that will
help us better deal with the challenges of climate change," he
"For example, we are looking at catastrophe bonds that would
have like an insurance component to it. We've been working with
the World Bank on these products," Purisima said without
Purisima complained that the credit rating agencies had
lagged behind the market when it came to upgrading the
"The market rate is three notches higher that our rating. We
are probably the most under-rated country in the region if not
the world. We are in constant discussion with them, but the
important thing is that the market is allowing us to borrow at
close to what Malaysia is borrowing, in fact our CDS (credit
default swap) is tracking Malaysia so that we are rated by the
market like an A credit," Purisima said.
Local media in the Philippines quoted National Treasurer
Rosalia de Leon as saying last month that the Philippines may
consider another bond swap in coming months after a
successful $1-billion exchange in the international market in
De Leon was quoted in the Business Inquirer as saying that
increasing yields of Treasury bills and bonds had raised the
potential need for another initiative that would help sustain
the government's declining debt burden.
In January, the Philippines raised $1.5 billion from what
was its first global bond sale after more than a year of absence
from the offshore debt market.
De Leon said then that only $500 million of the amount
raised would be used to bridge the government's shortfall this
year while $1 billion would go to buy back outstanding bonds.
The sovereign bonds were sold to yield 4.20 percent, lower
than the indicative guidance of 4.50 percent.
The Southeast Asian economy is seeking to cut its dependence
on foreign borrowing by pursuing debt buy backs and swaps, and
innovative deals such as local currency-denominated global
bonds, a move that has been praised by credit rating agencies.
Ratings agencies Fitch Ratings, Standard & Poor's and
Moody's raised the Philippines to investment grade last year,
citing among other factors the government's improving public
(Reporting by David Brunnstrom; Editing by Andrea Ricci)