Philippines says may delay Samurai issue to 2010

MANILA, Oct 23 - The Philippines may postpone a planned Samurai bonds issue to next year with the government and Japan Bank for International Cooperation yet to agree on the guarantee pricing, a senior government official said on Friday.

State-backed JBIC has guaranteed up to $1 billion of the country's planned yen bond sale within the next two years.

Manila had asked JBIC to lower the guarantee cost to make the bond a cheaper source of funding for the debt-laden Southeast Asian economy.

"We can have it next year," Finance Secretary Margarito Teves told reporters. "We are closing the gap (on the guarantee fee) but we are not yet there, the dynamics of negotiations can be unpredictable."

The Philippines had previously said it could sell up to $500 million of the yen bonds in the current quarter to finance part of its 2010 borrowing needs.

Manila, which expects a budget shortfall of 233.4 billion pesos , or 2.8 percent of GDP, next year, wants to secure most of its debt needs for 2010 before the market becomes cautious ahead of the May presidential elections.

Last week, the Philippines, one of Asia's most active sovereign debt issuers, sold $1 billion in 25-year global bonds, its third issue this year, bringing its total sovereign debt sales this year to $3.25 billion. [ID:MAN475385]

"The recent borrowing that we had through the international bond market gives us a level of comfort," Teves said. "That will take care of gap this year and provide us a little cushion for next year.

Analysts expect Manila's budget gap to balloon to 285 billion pesos this year, higher than the government's 250 billion pesos target, equivalent to 3.2 percent of GDP. [ID:nMAN362569] Teves had said the worst case was for a shortfall of 300 billion pesos in 2009 if the government fails to sell assets.