The Philippines plans to issue $1.5 billion in global bonds this year to finance increased government spending and a widening budget deficit, according to Treasurer Roberto Tan.

Tan said seven banks including Credit Suisse Group AG, Deutsche Bank AG and UBS AG responded to the government?s invitation for bids to arrange the sale.

Sources said the government would likely tap Credit Suisse, Deutsche Bank and and Hongkong and Shanghai Banking Corp. as arrangers, adding that Manila was looking at maturities of 10 and 25 years.

The sources said the Monetary Board approved the commercial borrowing in its meeting before the long holidays.

Tan told reporters after yesterday?s auction of three-year bonds that the government planned to raise as much as $1.5 billion from the international capital market, or triple the $500 million it raised when it reopened its US dollar-denominated bonds in January last year.

?That is the maximum amount that we will borrow. That is our borrowing program,? he said.

The national treasurer said the government was waiting for the right time to issue the bonds and would let the market decide if the entire amount would be raised immediately.

?It depends on the market appetite. It makes sense to be in the market at the right time,? Tan said.

Tan told reporters the government planned to borrow only $1.5 billion this year from commercial sources and $1 billion to $1.1 billion in overseas development assistance from multilateral and bilateral sources like the World Bank, Asian Development Bank and Japan Bank for International Cooperation.

The national government increased its shelf registration with the US Securities and Exchange Commission in November that will allow it to issue as much as $2 billion in bonds and warrants.

The Philippines filed a prospectus with the US SEC on Dec. 24, seeking $4.453 billion this year for direct external debt service requirements, up from last year?s $4.171 billion.

The central bank earlier urged the national government to borrow $750 million from the overseas markets even before the collapse of Lehman Brothers in September.

The government last borrowed from the international credit market in February when it issued $500 million in global bonds maturing in 2032 at an interest rate of 6.375 percent, its lowest commercial borrowing cost. Credit Suisse First Boston and Deutsche Bank acted as underwriters for the bond issue. Eileen A. Mencias, Lawrence Agcaoili and Bloomberg