The Republic of the Philippines has mandated Citigroup, Deutsche Bank and UBS to lead a proposed $1 billion - plus bond deal. The deal is expected to be a ten-year transaction.
The Philippines needs $850 million to complete its funding requirements for the year. The remaining portion is to be used as pre-funding for the 2006 budget.
The Philippines, Asia's largest seller of overseas debt, has not issued bonds since May following the surfacing of two scandals in June that have significantly weakened Arroyo's position in Malacanang palace and left her progressive economic proposals in limbo awaiting the outcome of the much maligned impeachment process.
In July, international rating agencies put the Philippines on credit watch, reducing their respective outlooks from stable to negative. However, many of the major investment banks have raised their recommendations for the Philippines in recent weeks.
Arroyo's new look economic team, led by new Finance Secretary Margarito Teves, won a major victory last week after the Supreme Court ruled unanimously that the Extended Value Added Tax bill (E-Vat) is indeed constitutional and will be implemented upon finalization of the ruling in October.
The mandate coincides with the release of the country's mid-year economic briefing. Yesterday afternoon (Tuesday) the economic team announced that despite the political uncertainty and record high oil prices economic growth in the archipelago has remained buoyant amid growing investor confidence in the mining, information technology and the health sectors.
In a statement from the Department of Finance, Teves said, "The government's fiscal programme is on track supported by prudent government expenditure and stepped-up revenue collection, which helped achieve a lower-than-expected fiscal deficit in the first seven months of the year. The Supreme Court's decision to uphold the legality of the VAT reform law will propel our reform programme forward and enable investments in job creating infrastructure and services that will help to drive economic growth."