UPDATE 1-Manila raises $1.5 bln in global bonds to boost growth

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By Karen Lema

MANILA, Jan 8 (Reuters) - The Philippines raised $1.5 billion in 10-year dollar bonds in what was the first Asian offshore sovereign issue this year and bankers said Manila was fortunate to bag additional liquidity amid a global credit crunch.

The issue -- four times oversubscribed -- was Southeast Asian nation's single biggest global bond offer in more than three years and fetched a yield of 8.5 percent, at the lower end of indicative yields that extended to as high as 8.75 percent.

"The acceptance of the Philippine credit is quite positive in the international capital markets, that is a plus," said Joey Cuyegkeng, economist at ING Bank in Manila. "It gives you some sense that the Philippines is still on the radar screen of investors."

The bonds have a spread of almost 600 basis points over corresponding U.S. Treasuries -- above the Philippines' existing yield curves -- which meant the government offered fatter payouts to attract investors.

It was priced at 99.158 percent, with a coupon of 8.375 percent.

"It's expensive, but in a world where nobody wants to lend, the fact that you were able to get that cash is a good sign," said a fixed income trader at a foreign bank in Manila who asked not to be named due to company policy.

With the issue the Philippines has already fulfilled its overseas borrowing plans for this year, raising fresh money to partly fund a 1.41 trillion peso ($30 billion) budget this year that is aimed at protecting economic growth.