The Bangko Sentral ng Pilipinas (BSP) told local banks to treat their investment in a planned sale of more than $500 million of global peso bonds as part of their dollar holdings, limiting their capacity for purchases.

Philippine banks should assign the debt the same risk- weighting in their books as securities denominated in foreign currencies, BSP Deputy Governor Nestor Espenilla said in an interview. Rafael Algarra, treasurer at Security Bank Corp.. said he is considering the implications of the rules.

“While this is peso-denominated, it is settled in U.S. dollars and all payments are indexed to the peso spot rate,” Espenilla said. “There is foreign-currency risk to the investor.”

Philippine banks have been buying global debt sales by the government, taking advantage of deposits from overseas workers and exporters to buy about 20 percent of the $1.5 billion dollar bonds the government sold in January. Union Investment and Erste Sparinvest KAG said they are interested in buying the peso debt because it is exempt from a 20 percent tax on interest payments and Asian currencies are rising.

“There’s a bullish run for Asian region assets on the view Asia will be performing better than Europe and America,” Algarra said. “Funds are flowing in the region.”

The government has central bank approval to sell up to $1 billion of 10-year peso notes to international investors, a government official said on Sept. 2. Citigroup Inc. and Deutsche Bank AG are the global coordinators for the bond sale, while Credit Suisse Group AG, Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan Chase & Co. are the joint book runners.