MANILA, Philippines--The government Tuesday made a successfull return to the Japanese financial market as institutional investors bought 100 billion yen in samurai bonds, or about $1.1 billion at current exchange rate.

Finance Secretary Margarito B. Teves said the 10-year issue fetched a coupon rate of 2.32 percent a year.

Buyers of the yen notes, called Shibosai bonds to refer to a private placement exclusively for institutional investors, have until March 2 to wrap up the purchase.

The flotation was arranged jointly by Daiwa Securities Capital Markets, Mitsubishi UFJ Securities and Nomura Securities and carried a partial guarantee from Japan Bank for International Cooperation (JBIC).

An agreement with JBIC that the government signed last week allowed the Philippines to issue up to 100 billion yen, carrying a 95-percent guarantee.

Teves said Japanese bond investors showed strong interest for the placement following an extensive marketing effort, including a series of one-on-one investor meetings in Tokyo earlier this month with a team headed by National Treasurer Roberto B. Tan and Finance Undersecretary Rosalia V. de Leon.

Teves said the amount of funds that investors?including banks, insurance companies, cooperatives and other financial institutions?made available to buy the bonds ?far exceeded? the 100 billion yen.

He added that the amount represented the biggest ever bond issue made by a non-Japanese, Asian borrower in Japan.

The last time that the Philippines tapped the Japanese financial market was in 2001 when $414 million or 50 billion yen worth of bonds was sold directly to investors.

?The delegation presented the strong credit story of the [Philippines], which was favorably received by bond investors,? Teves said. ?This allowed [us] to set the issue size at the maximum amount under the agreement with the pricing at the tighter end of the marketing range.?

The finance chief said the funds raised ?will be helpful in providing for the needs of our people and enabling us to achieve modest economic growth this year.?

In January, the government raised $1.5 billion in dollar bonds through a global issue launched in the United States.

Teves added that the latest bond issue completed the government?s planned foreign commercial borrowings of $2.5 billion for 2010.

He said the placement also represented the first JBIC-guaranteed Samurai bond issue in 2010.