Asked if the Philippines would like to build up its borrowings ahead of the war, Camacho replied: "Yes, if there were opportunities to the extent (that) we would want to pre-empt the risks of war."
The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP), has approved in principle the government’s plan to float $500-million worth of euro-denominated bonds.
Earlier this week, banking sources said the government had mandated JPMorgan, Credit Suisse First Boston and Deutsche Bank to handle the $500-million euro-denominated bond issue.
BSP Governor Rafael B. Buenaventura said "our recommendation is to float a seven-year bonds in order to avoid bunching up of maturities."
Camacho, however, declined to comment on the euro bond deal.
US Secretary of State Colin Powell produced evidence to the UN Security Council on Wednesday which he said showed that Iraq’s Saddam Hussein had allegedly concealed weapons of mass destruction from UN inspectors.
But members of the UN Security Council remained divided on how to deal with the Iraqi leader, leaving markets still facing a period of uncertainty. Asian dollar bond spreads widened five to 10 basis points yesterday on war worries.
The Arroyo administration has projected this year’s net foreign borrowings at P95.28 billion and net domestic borrowings at P103.27 billion, in part to fund the budget deficit estimated at P202 billion, or 4.7 percent of gross domestic product (GDP).
Last week, the government sold $200 million of one-year, zero coupon bonds to refinance outstanding debt. Just last month, the government also sold $500 million worth of 10-year bonds.