Purisima plans new debt swaps

The Philippines is considering bond swaps for the government’s local and foreign debt before an impending Federal Reserve interest-rate increase, Finance Secretary Cesar Purisima said. “If there’s market opportunity before the Fed acts, we will move,” Purisima, said in an interview in his office in Manila Friday. “We’re always on the lookout for both foreign and local opportunities to lengthen debt maturity and reduce overall interest cost.” He didn’t specify how much debt may be swapped. The government is addressing a “systemic problem” in delays to state spending including ways to accelerate outlays for infrastructure projects, Purisima said. Economic growth slid to a three-year low last quarter, putting pressure on President Benigno Aquino to fix bottlenecks before an increase in U.S. interest rates that could stoke financial market volatility. “We are trying to correct the system and when you are reforming, the results can sometimes be unpredictable,” Purisima said. “The good thing is we have the fiscal space.” (Bloomberg)