Oct. 19--THE Philippines raised an additional $1 billion in commercial borrowing abroad--its third global bond offering this year--for the rehabilitation of areas hard hit by typhoons Ondoy and Pepeng. First offered in January 2007, the reissued 25-year sovereign bonds--also called Republic of the Philippines debt papers (ROPs)--will mature in October 2034.

The notes were priced at 99.382 percent of their face value with a yield of 6.425 percent, or 216.5 basis points over benchmark US Treasuries.

According to the Department of Finance, the book building process, or the effort to secure buyers for the debt papers, took about 24 hours.

Twenty-five percent of the bonds were allocated to the Philippines, 25 percent to the rest of Asia, 37 percent to the US, and 13 percent to Europe.

"We are very pleased to have been able to extend the republic's maturity profile while at the same time achieving the lowest yield for a new 25-year benchmark US dollar global offering by the Philippines," Finance Secretary Margarito Teves said in a statement.

Deutsche Bank Securities Inc., the Hong Kong and Shanghai Banking Corp. Ltd. and Union Bank of Switzerland AG acted as joint lead managers and book runners for the transaction.

"Positive investor reception for this transaction allowed us to resume our long-term borrowing strategy to achieve our funding objective in support of our fiscal program," National Treasurer Roberto Tan said.

Besides financing its rehabilitation efforts, the government intends to use part of the proceeds for next year's funding requirements.

Before the twin typhoons, the government had expected it to resume its budget deficit reduction program next year after jettisoning this year's targets on account of higher public spending. The government raised its fiscal ceiling to P250 billion to prop up the domestic economy amid the worst global slump in decades.

Teves, however, had admitted that the deficit could exceed the program and hit P300 billion due to the massive spending required to rehabilitate areas devastated by the twin typhoons.

Official estimates of the two typhoons' damage run to about P15 billion in terms of damaged infrastructure and foregone harvest, but pundits warned that the country's competitiveness would take a hit.

Past surveys on international competitiveness had scored the Philippines' poor infrastructure as a disincentive to investments.

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