Philippines shuts retail bond sale in two tenors-arranger

MANILA, Sept 16 - The Philippines has closed the sale of retail Treasury bonds in two of three tenors, due to overwhelming demand, one of the arrangers said on Wednesday.

The sale, which started on Tuesday, has so far raised an estimated 90 billion pesos ($1.87 billion) and the amount could reach 100 billion pesos, likely enough to cover the government's local funding needs for the rest of 2009, he said.

"This was beyond our expectations," First Metro Investment Corp executive vice president Juanchito Dispo told Reuters.

"Demand was overwhelming. This will be more than enough to adequately cover the funding requirements of the BTR (Bureau of Treasury) for the fourth quarter and this may prompt the BTR to review and reduce its borrowing requirements for the first quarter of 2010," Dispo said.

The Bureau of Treasury closed the sale of 3-year and 5-year retail bonds on Wednesday, Dispo said, and will limit the offer to 3 billion pesos of 7-year paper each day until the end of the offer period on Sept 22.

FMIC is one of the seven arrangers of the retail bond issue. The others are BPI Capital Corp, BDO Capital, Rizal Commercial Banking Corp, Metropolitan Bank & Trust Co, Land Bank of the Philippines and Development Bank of the Philippines.

Manila has set a local borrowing plan of 451.7 billion pesos this year to finance its budget deficit.

As of Sept 9, the government had sold 209.676 billion pesos worth of bills and bonds via regular auctions so far this year, based on Reuters calculations. The government also sells bills and bonds through an over-the-counter window.

Manila faces a record deficit this year of 250 billion pesos, or 3.2 percent of GDP, as a result of stimulus spending.

National Treasurer Roberto Tan had said Manila would adjust its yet-to-be disclosed local borrowing plan in the fourth quarter depending on the proceeds from the retail bond sale. ($1 = 48.055 pesos)