Manila hopeful of hitting budget gap goal; asset sales

* Manila hoping to sell three state assets within the year

* Says looking at a yen bond issue in early 2010

SINGAPORE, Nov 13 - The Philippines is hopeful of selling some state assets before the year ends to allow it to keep within a budget deficit target that is already a record high, Finance Secretary Margarito Teves said on Friday.

Manila, one of Asia's largest sovereign debt issuers, was also considering a Samurai bond sale early next year as part of a $2 billion foreign debt plan to fund its 2010 fiscal deficit.

"We remain hopeful in achieving the 250 billion pesos ($5.3 billion) deficit target this year," Teves said in the Dealing Room, a Reuters Messaging chatroom.

"We're talking with a few parties regarding the sale of FTI but we cannot disclose yet their identities. We are also hopeful that we can dispose other big ticket items like the PNOC-EC and our shares in San Miguel Corp," he said.

The government wants to sell a 40 percent stake in oil-and-gas explorer PNOC Exploration Corp <PEC.PS> <PECB.PS>, which it estimates to be worth 11 billion pesos.

It also wants to sell preferred shares in San Miguel <SMC.PS> <SMCB.PS>, the country's second most valuable firm, and the 103-hectare FTI commercial estate in Manila that it had valued at around $279 million.

"We are hopeful that we could sell all three within the year," Teves said.

Teves said earlier this month the government would likely exceed its fiscal shortfall goal this year despite the sale of FTI and its PNOC-EC stake as it spends more for reconstruction following strong typhoons that damaged crops and infrastructure on the main Luzon island. [ID:nMAN537250]

Last month, the Philippines sold $1 billion in 25-year global bonds, its third issue this year, to fund its 2009 and 2010 fiscal shortfall. [ID:nMAN516490]

It has been in talks with the Japan Bank for International Cooperation to finalise the guarantee pricing for a yen bond issue, which it earlier indicated could be around $500 million.

"We hope to do it early part of the year," Teves said on the Samurai bond sale. "For next year, our external financing from commercial sources is $2 billion. That's consistent with our external borrowing programme for 2010."

Teves, chairman of state agency PSALM which is planning to issue $600 million in global bonds and launch a $600 million debt swap offer this year, said the agency was still assessing the possibility for the debt sale. [ID:nMAN541811]

PSALM, or the Power Sector Assets and Liabilities Management Corp, has secured the central bank's approval for its bond issue and debt swap offer, a government source told Reuters on Thursday.

"We are still looking at market conditions to proceed with PSALM bond sale," Teves said. "PSALM would still have to get the necessary approvals to be able to announce the banks that they have mandated for the bond sale."