PSE fallout hurts $1.2-B Global bond float

The Philippine Stock Exchange (PSE) may have been able to open for trading yesterday, but damage has already been inflicted on the government's planned $1.2-billion Global bond offering.

This was admitted yesterday by both Finance Secretary Jose T. Pardo and Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura who said that news of the threatened suspension of trading at the PSE immediately reached London where a Philippine team is conducting a roadshow to "sell " the Global bonds.

Pardo and Buenaventura said that instead of an outright purchase, some foreign buyers have opted to do a "conditional purchase," seeking further assurance the local financial system is stable.

Pardo assured that government is still in full control as evidenced by its decisive move to keep the local bourse open yesterday despite an order from Securities and Exchange Commission (SEC) Chairman Perfecto Yasay for an indefinite suspension of trading in the PSE after the exchange's entire Compliance and Surveillance Group resigned.

He pointed out that while it is true that "some investors and foreign funds have moved out of the market, they have done so to look at other opportunities and markets."

Finance Undersecretary Joel Banares and BSP Director for Economic Research Diwa Guinigundo are in the midst of a roadshow in London to drum up interest for the government's planned $1.2-billion Global bond offering.

Government sources said the response to the bond offering had already been lukewarn due to the continued sluggish growth of the economy and political controversies hounding the Estrada government.

A recent poll of fund managers reportedly ranked the Philippines as second to the least attractive country for investors with Indonesia considered just a little bit worse than the country.

The planned Global bond offering is composed of a new cash offering and exchange and tender offers for outstanding Yankee bonds of the National Power Corp. (Napocor). It will consists of two tranches due 2010 and 2025. The minimum size of each tranche, including bonds issued pursuant to the exchange and tender offers will be $500 million. -