P25-B bonds eyed to capitalize BSP
abs-cbnNEWS.com | 06/25/2009 9:44 PM
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MANILA - The government will issue P25 billion worth of sovereign bonds to capitalize the Bangko Sentral ng Pilipinas.
Required by law, the government should be infusing P40 billion as equity into the central bank--a commitment that fiscal officials said would not likely be met this year.
BSP deputy governor Diwa Guinigundo said, however, that they are open to the proposal of the government to raise at least P25 billion through a bond issue. He said they are still negotiating the details of the planned debt issue, but they are hoping to get the offer oof the ground before the year ends.
Guinigundo said the capitalizaiton of the BSP will have 2 components: a P15 billion direct cash infusion from the government, and the bond issue that is still under negotiation.
The cash infusion is also not expected to happen this year.
When the BSP was formed in the early 90's as a spin-off of its predecessor, the bankrupt Central Bank, BSP's charter required the government to infuse P50 billion as a start up capital.
So far, the BSP has only received P10 billion.
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