MANILA, Philippines — The Department of Finance (DoF) is maintaining the remaining $500-million commercial borrowing for the year saying the decision on whether the state will increase the amount or not will depend on its funding requirement.

Finance Secretary Cesar V. Purisima explained that the Aquino administration will keep its borrowing options open and will be opportunistic in overseas bond sales as a lower budget deficit eased additional funding pressure.

“The deficit so far is only P9 billion, we're way ahead in terms of our deficit program. We will make our decision depending on our needs,” Purisima said when asked about the country's remaining $500 million overseas borrowing plan.

National Treasurer Roberto B. Tan, meanwhile, said that the government still plans to issue about $500 million worth of debt to overseas investors this year as part of its 2011 program.

Tan, however, pointed out that the timing and structure of the debt sale has yet to be determined.

Purisima earlier disclosed that the government was talking with its financial advisers regarding a potential “liability exercise” within this year for local or foreign market.

He said the government is waiting for the right opportunity to return to the market with plans for a potential global peso bonds sale or swapping dollar-denominated debt into peso notes.

“We will just look at the market and see if there are opportunities, and if there are opportunities we will go to the market, in fact, we have been talking to our advisers about a potential liability exercise,” Purisima said.

But Purisima also said that the government is not in a hurry when it comes to borrowing as the country’s revenues remain strong amid prudent spending.

He said the government’s goals remain the same, “lengthen our maturities as well as reduce our costs, reduce the bunching ups and reduce the foreign currency component.”

Hoping for an investment grade rating from global debt watchers by midway into his term, President Aquino plans to increase its tax take without new taxes and just focus on enforcing existing tax laws, cut corruption in government and run after tax evaders and smugglers.

Fitch Ratings earlier raised the country’s long-term foreign currency bond rating to BB+ from BB, or one step below investment grade, due to government’s efforts to reduce its budget deficit.

Moody’s Investors Service also upgraded the country's foreign and local currency long-term bond ratings to Ba2 from Ba3, the highest level since the start of 2005. The upgrade was largely credited to President Aquino's efforts to target tax evaders and convince investors the government can narrow a record budget shortfall.

Higher debt ratings reduce the cost of borrowing, making it cheaper for the Philippines to sell debt to fund spending on roads, bridges and schools.