By PNA and U.S. News Agency / Asian

The government’s bid to lengthen its debt profile continues as it plans to swap shorter-dated notes for 10- and 20-year Treasury bond within the month.

National Treasurer Roberto Tan said they have tapped the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (Landbank) as issue managers for the debt exchange.

“We’re studying market demand and asked government financial institutions to help. We don’t have definite numbers yet,” he said.

Tan, however, declined to give figures on how much they want to swap.

Relatively, Deputy Treasurer Eduardo Mendiola also declined to give specific figures but said volume to be swapped might be similar to what they exchanged last December.

He was referring to the P200 billion worth of 10- and 25-year notes issued in the last month of last year.

The present administration wants to lengthen the maturities of its debt instruments as part of its debt consolidation program and to minimize refinancing risks.

Earlier, Finance Secretary Cesar Purisima said debt swaps conducted by the Aquino administration enabled the government to lengthen by almost a year the maturity of its liabilities.

Data released by the Bureau of the Treasury (BTr) showed that average maturity of government’s debt at the end of 2010 improved to 8.8 years as against the 7.9 years in end-July last year.

Specifically, domestic debt’s average maturity is now at 6.66 years from 5.45 years while that of foreign liabilities’ to 11.37 years from 10.8 years at end-June 2010.

The national government’s liabilities include the issuance of debt instruments, loans from multilateral agencies and assumed liabilities from government-owned and controlled corporations.

“Lengthening our maturities has been one of our key goals at the Department of Finance and we are happy that steps we undertook since July last year are now bearing fruit,” Purisima said.

The government conducted a foreign bond swap last September through the issuance of US$ 3 billion worth of bonds due 2021 and 2034. Along this is the fresh issuance of US$ 200 million worth of bonds due in 2021.

Similarly, a domestic debt exchange was done last December enabling the government to swap maturing debt papers to P33.45 billion worth of 10-year bond and P166 billion worth of 25-year bonds or a total of P199.46 billion.

Purisima said the government now has “more time to improve the economy so that by the time our debts mature, we will have enough capacity to settle them.”

He noted that infrastructure projects and social programs now have more funding because of the lengthening of the government’s debt maturity profile and this would help boost the administration’s poverty-alleviation program.

“These resources would have otherwise been allocated for debt payments which do not have a direct effect to the public,” he added.