Manila, Asia's most prolific sovereign borrower, will pay bondholders a total $1.7 billion, including purchase price and accrued interest, a government statement said. It had set a ceiling of $1.5 billion in principal amount for the buyback offer.

It received total offers of $2.2 billion out of more than $17 billion US dollar and euro bonds eligible for the debt repurchase programme, with the issues ranging in maturity from 2013 to 2032. The amount of bonds bought was equal to 7.4 percent of the principal of the eligible bonds.

"This should be supportive of our effort to obtain investment grade ratings," Finance Secretary Cesar Purisima said in a statement.

Citigroup and J.P. Morgan were joint global coordinators, and joint dealer managers along with Goldman Sachs (Asia) LLC , HSBC , Standard Chartered Bank and UBS .

Funding came from the Bureau of the Treasury's bond sinking fund, and proceeds of a $50 million reopening of its 6.375% 2034 deal which was priced on Tuesday.

The Philippines has been innovative in its debt management, becoming the first in Asia to sell global bonds denominated in the local currency to wean itself off costly foreign debt. It had also offered local and foreign debt swaps this year and in recent years.

Its efforts were rewarded by credit rating agencies, with Fitch Rating upgrading the country's rating to within one notch of investment grade in June. Moody's Investor Services and Standard and Poor's both rate the Philippines at two rungs below.

IFR, a unit of Thomson Reuters, said the Philippines' latest debt management move inspired broader market confidence on the Southeast Asian country.

"It sends a positive signal to the investor community on two counts. First that the country is confident about its economy and growth prospects, and second that the authorities are capable and willing to take such actions as and when they deem fit," said Tanuj Khosla, Singapore-based research analyst with 3 Degrees Asset Management.