The government said yesterday it will sell debt-exchange warrants this month for the second time in 2008 to allow holders of its foreign currency bonds to convert to peso bonds in case of default. The warrants will be sold by Dutch auction process starting on May 29 and the minimum price will be announced on May 28, the government said in a statement. The government did not indicate the size of the offer. "The volume has not been set, but we may impose a limit," Acting National Treasurer Roberto Tan told Reuters. Manila sold $ 2-billion worth of debt-exchange warrants in February, when the protection scheme was first launched, $ 500 million higher than anticipated. The new warrants will give holders of Philippine sovereign bonds maturing on or after November 15, 2017 and prior to September 20, 2032, the option, if there is a default, to exchange their exposure into peso-denominated Treasury bonds maturing in 2032. The government will start a four-day investor roadshow for the warrants on May 13. It expects to announce the results of the auction on June 2. The paired-warrant is different from credit default swaps (CDS), which also offer insurancelike protection to bond holders, but the CDS settle in cash while the warrant gives peso T-bonds in exchange.

State pension fund Government Service Insurance System may be open to buying the Lopez family’s stake in Manila Electric Co., GSIS President Winston Garcia said yesterday "We are willing to sit down with them to discuss the extent and terms of their decision to sell," Garcia told Dow Jones Newswires. He added that he believes electricity rates may do down if a different management — "not necessarily GSIS" — takes over. His comments come a day after Oscar Lopez — patriarch of the Lopez family, which controls Meralco — said he is willing to sell the family’s stake in the country’s largest power distributor by sales to the government. "I’m sick and tired of this business. We can’t even get a rate increase because the government is saying our rates are too high," said Oscar Lopez, chairman of First Philippine Holdings Corp., which owns 33.4 percent of Meralco. He added, however, that he is yet to consult other members of the family about a possible sale. Meralco distributes electricity in Metro Manila and its neighboring provinces — an area which accounts for half the country’s gross domestic product. (Dow Jones)

The government will announce next week whether it will exercise an option to buy Saudi Aramco’s 40 percent stake in oil refiner Petron Corp , the president of the Philippine National Oil Co. (PNOC) said yesterday. "We will meet on Monday and announce our decision that day," PNOC president Antonio Cailao told Reuters. "Nothing is final yet." PNOC has the first option to buy the stake and has until May 12 to decide whether or not it will exercise the option. Petron, the Philippines’ largest domestic refining company with a network of about 1,200 service stations, is 40 percent owned by PNOC and 40 percent by Aramco. The rest is held by individual investors. Saudi Aramco, state oil firm of the world’s biggest oil exporter, has received an offer of $ 550 million for its Petron stake from London-based investment fund Ashmore Group .JG Summit Petrochemical Corp., controlled by the Gokongwei family, which also owns the country’s second biggest airline Cebu Pacific, has offered to buy the government’s shares in Petron for $ 579 million. The offer from JG Summit Petrochemical Corp values Petron at 6.55 pesos per share, about a 9.2 percent premium to its closing price of 6 pesos on Friday.

The government has secured a $ 650,000 technical assistance from the Asian Development Bank (ADB) to help improve provincial and local planning and expenditure management. The grant builds on the achievements of an earlier ADB technical assistance that strengthened the institutional and technical links between the plans and programs of local government units and national programs and priorities under the medium-term development plan. The assistance would also support the joint memorandum circular signed by the National Economic and Development Authority (NEDA), Department of the Interior and Local Government, Department of Budget and Management, and Department of Finance.