BSP OKs P300 B bond swap

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved a plan by the National Treasury to launch a P300 billion bond swap this year as the country looks to lengthen its debt maturities and cut costs, National Treasurer Roberto Tan said yesterday.

“We have the approvals, so we are now in deliberation mode,” Tan said.

Tan said while the approved maximum amount is P300 billion, the Treasury is still determining how much it needs before it would announce the bond swap.

“This will depend on the pricing and the date. We’re still in discussions,” he said.

The government said earlier a bond swap would likely occur before the US Federal Reserve decides to adjust its interest rates. Tan said this remains to be case even now as the Treasury prepares to implement the peso bond swap.

“We’d like to do it while we have the time because as we approach closer and closer (to a US Fed rate hike), market jitters will increase even if there’s a lot of graduality in the way the Fed is doing things,” Tan said.

The US central bank has left interest rates near zero following the global financial crisis. The Fed implemented then a massive bond-buying program to pump money in the ailing US economy.

In May 2013, global financial markets were sent reeling after the Fed hinted it may start withdrawing its stimulus as the US economy has been showing signs of recovery.