(STAR) By Iris C. Gonzales - The Philippines has mandated Deutsche Bank, HSBC and UBS Investment Bank as joint bookrunners for a planned dollar-denominated bonds issuance worth at least $500 million, the Department of Finance (DOF) said yesterday.

Government officials would not confirm the amount and the exact launching date but market sources said the size could be at least $500 million and may exceed $1 billion depending on market appetite.

The Philippines plans to sell 25-year in dollar-denominated debt at a yield of roughly 6.5 percent.

Sources said the pricing of the transaction was likely set Friday evening (Manila time) or during New York trading hours.

Finance Secretary Margarito Teves said proceeds of the global bond would likely be to fund rehabilitation and rebuilding requirements and to pre-fund financing needs next year ahead of the presidential polls set in May.

Investors are usually wary during election time when a new administration comes in because of changes in policies.

Teves, for his part, said the government is also still open to issuing Samurai bonds to finance its needs.

However, with the global bond issuance happening soon, the Philippines is likely to issue Samurai bonds at a later date this year or early 2010, market sources said.

Samurai bonds are yen-denominated bonds issued in the Japanese financial market by a foreign government or company.

The Philippines and the Japan Bank for International Cooperation (JBIC) have signed a memorandum of understanding (MOU) for the planned Samurai bonds last June and are set to sign another agreement lowering the guarantee fee.

Under the MOU, JBIC would guarantee 95 percent of the present value of all principal and interest payments but the Philippines is still waiting for JBIC to lower the guarantee fee.

Since June, the government has been lobbying before JBIC for lower or a “more competitive” guarantee fee to effectively reduce its borrowing costs.

House OKs P1.5-trillion budget for 2010 By Jess Diaz (The Philippine Star) Updated October 17, 2009 12:00 AM

MANILA, Philippines - The House of Representatives approved on second reading yesterday President Arroyo’s proposed P1.541-trillion 2010 national budget.

Approval came shortly before 3 o’clock in the morning and capped a marathon session that started at 10 a.m. on Wednesday. Lawmakers are taking a three-week break starting this weekend.

The President’s proposal was approved without amendments.

Speaker Prospero Nograles said he and his colleagues would now work on changes in the budget to allocate more funds for the needs of typhoon victims and their communities.

He said the House hopes to approve the spending bill on third and final reading and send it to the Senate when Congress reconvenes on Nov. 9.

“The two chambers should be able to finally pass it before the end of the year. I assure our people that there will be no reenactment of this year’s budget in 2010,” he said.

He added that the marathon session and the approval of the budget “prove that the House of the People is united when it comes to national interest.”

Opposition lawmakers have expressed fears about a budget reenactment, which they said would give the administration wide leeway to use funds for the May 2010 presidential elections.

Senior Deputy Majority Leader Neptali Gonzales II said before adjourning its session that the House created a small committee to receive proposed amendments in the budget from congressmen during the break.

He said the panel is composed of Representatives Junie Cua of Quirino and Edcel Lagman of Albay, chairman and senior vice chairman, respectively, of the appropriations committee; and Majority Leader Arthur Defensor and South Cotabato Rep. Darlene Antonino-Custodio as representatives of the rules committee and the minority, respectively.

“They will collate all proposed amendments and endorse the final changes in accordance with the priorities of President Arroyo and of the House,” he said.

He added that he and his colleagues would see the recommended changes when the budget is presented for third-reading approval on Nov. 9 or 10.

Chief News Editor: Sol Jose Vanzi

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