PH selling ‘panda’ bonds next month

The Philippines will sell panda bonds in China next month after it secured approval from Chinese regulators, Finance Secretary Carlos G. Dominguez III said.

“The issuance of panda bonds was approved by the People’s Bank of China and NAFMII on Feb. 9,” Dominguez said, referring to the National Association of Financial Market Institutional Investors.

According to its website, NAFMII is “a self-regulatory organization, which aims to promote sustainable development of China OTC (over-the-counter) market through innovations, self-discipline and serving market players.”

National Treasurer Rosalia V. de Leon said they would launch the panda bonds offering in March.

“Of course, this is subject to a good window and competitive pricing,” de Leon added.

The Philippine government plans to issue $200 million or about 1.4 billion renminbi in three- to five-year panda bonds.

Last December, economic managers raised the share of foreign borrowings in this year’s financing program due to the government’s upcoming foray in the Chinese and Japanese debt markets.

The Cabinet-level Development Budget Coordination Committee had increased to 26 percent the share of external borrowings in 2018 from 20 percent previously.

Dominguez had also said that the government planned to sell samurai bonds, yen-denominated IOUs issued in Tokyo by foreigners, toward the end of the year to diversify sources of financing for the ambitious “Build, Build, Build” infrastructure program.

Last month, the Philippines sold $2 billion in 10-year, dollar-denominated global bonds at a coupon rate of 3 percent.