HONG KONG - Asian bonds edged higher on Tuesday, boosted by a rise on Wall Street and stronger regional stocks, but gains were capped by expectations of new issues.

Philippine bonds erased some of Monday's losses after Finance Secretary Margarito Teves told reporters Manila was reconsidering the 70/30 domestic-foreign mix of borrowing, which sparked fears there could be a new global debt offering.

"The stock markets are not doing too badly today, but then we are looking for new issues and that is putting a damper on the market," said a Singapore-based trader.

The iTRAXX Asia ex-Japan high-yield index , a key measure of risk aversion, moved in by 14 basis points to 466 bps while the index of investment-grade names <ITAIG5UA=ITX> moved in to 97 bps from 104 bps.

Issuers are watching the progress of a dollar bond sale from Indonesia's PT Truba Alam Manunggal Engineering Tbk to gauge appetite for new debt.

The Indonesian energy and construction firm is selling $100 million to $150 million in three-year senior unsecured notes, at an indicated yield of 17 to 18 percent. It is the first global high-yield debt issue from Asia this year.

"It's a tough market. There are a host of names waiting to raise funds -- Chinese developers who cannot borrow onshore, Indian banks looking to recapitalise and Korean banks seeking better funding levels," said the Singapore based trader.

Bond issuance from Asian names excluding Japan in dollars, euros and yen slumped to $548.3 million in February and $561.2 million in March, the lowest monthly totals since May 2004, according to Thomson Reuters data.

Philippine bonds recovered a little after dropping a quarter of a point on Monday following the Finance Secretary's comments.

Manila's 2031 bonds <PHIGLB31=RR> were quoted at 111.75/112 cents to the dollar and its 2032 bonds <718286BD8=RRPS> at 96.75/97, higher by an eighth of a point.

Philippine credit default swaps <PHILP5UA=GFI> -- insurance-like contracts that protect against default and restructuring -- narrowed to 210/215 bps from 217 bps.

"Prices are flat to higher today. Yesterday's comments led to some concerns there could be some supply later this year," said a Manila-based trader.

President Gloria Macapagal Arroyo had made ending a decade of government deficits the centrepiece of her economic platform, but she admitted last month that the goal may not be attainable this year as planned.

The need to cushion the economy against a global slowdown and a surge in the cost of subsidising rice because of skyrocketing prices of the national staple have hit government finances. --REUTERS