(UPDATE) The Philippines said on Tuesday it would auction P20 billion ($400 million) of Treasury bonds next month aimed at retail investors, cutting the government's reliance on banks and insurance companies for its borrowing.
National Treasurer Omar Cruz told reporters the government would cancel December's planned auctions of P18 billion of Treasury bills and bonds for institutional investors.
An auction of P6 billion of seven-year Treasury bonds would go ahead next month, he added.
"The national government is revising its December auction schedule to give in to retail investor demand," National Treasurer Omar Cruz said in a mobile phone text message.
"At least P10 billion of the P20 billion issuance must go to individual investors."
Retail treasury bonds are sold for as little as P5,000 each and pay interest every six months.
Cruz said on Monday institutional investors were increasingly demanding longer-dated securities and he rejected bids for the benchmark 91-day paper after the offer was undersubscribed.
The Philippines, Asia's largest issuer of sovereign debt after Japan, has cut its 2006 target for local and foreign borrowing by 12 percent and 8 percent respectively as low spending and increased revenue have reduced its budget deficit.
The government wants to take advantage of strong dollar inflows and higher government revenue to cut its debt of about $79 billion and reduce its dependence on borrowing to fund its budget shortfall.
($1 = P49.84)
http://business.inquirer.net/money/breakingnews/view_article.php?article_id=33932
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