The Philippines started selling dollar bonds in Asia?s first public sale of high-yield foreign-currency debt this year, giving the government funds to respond to the worst economic slump in eight years.

The sale of 10-year securities drew bids for as much as $1 billion from Philippine buyers alone as of noon, twice the minimum target of $500 million, according to two people familiar with the deal, who asked not to be identified. ?This will help boost funds so the government can increase spending,? Treasurer Roberto Tan said yesterday.

The Philippines tapped Credit Suisse Securities, Deutsche Bank Securities and HSBC Securities as underwriters.

The bonds, which were expected to be priced in New York last night, may be sold between 8.5 percent and 8.75 percent, the two people familiar with the deal said.

?We hope it?s going to be a successful deal,? Tan said. ?We think 10 years is where the demand is.?

Finance officials said the government issued new 10-year benchmark bonds instead of 25-year issues as investors preferred shorter-term debt instruments in light of the uncertainties amid the global economic slowdown.

Tan earlier told reporters that the Philippines would issue up to $1.5 billion sovereign bonds, depending on market appetite, or three times the $500 million raised in January last year when it reopened its existing US dollar-denominated bonds due 2032.

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

?The yields are attractive and with the strong demand, it looks like the government can complete its full-year overseas requirement already,? said Yvette Marquez, who helps manage about $6.9 billion in assets as a senior trader at BPI Asset Management. ?It?s best to be over and done with before other emerging-market issues flood the market.?

Brazil and Colombia each sold $1 billion of bonds Monday and Chile said it may also tap international markets. South Korea?s government plans to borrow up to $6 billion this year and Indonesia in November said it may raise about $2.1 billion in dollar-denominated debt in 2009.

The Philippines has limited its foreign borrowings to $2.6 billion this year despite the expected wider budget deficit due to the slackening economy brought about by the financial turmoil in the United States.

The government plans to raise another $1.1 billion from official development assistance loans from multilateral lending agencies led by the World Bank, Asian Development Bank and Japan Bank for International Cooperation.

The Philippines relies heavily on foreign and domestic borrowings to finance the budget deficit and trim its financial obligations. Lawrence Agcaoili, Bloomberg