Philippine government ABS: pipe dream?

The Philippines government is once again evaluating a securitization deal to alleviate its debts. Among the assets being considered are natural gas and gambling revenues. Local bankers, however, have raised eyebrows at the news.

A previous plan in 1999 to securitize future receivables from the state-owned Philippines Amusement and Gaming Corp Pag Corp which was mandated to Bear Stearns and Lehman Brothers was scrapped because it was deemed impossible to market to domestic and international investors.

In addition, there are legal and taxation issues that make it extremely difficult to launch an asset-backed securitization ABS from the Philippines.

None of this seems to have deterred the government, for the time being at least....

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