The Philippine government has launched its $2-billion global offering of 10-year bonds, half of which will be used to finance the country’s budgetary and infrastructure needs.
In a notice on Thursday, the government said it started to offer the US dollar-denominated bonds due 2028 on Jan. 18, with the settlement of the new bonds on Feb. 1. The rate will be determined Thursday night, Manila time.
The government also sought to swap $1 billion for 14 earlier issued bonds due 2019 until 2037.
The deadline of submission of offers for the bond swap will be early morning on Jan. 19, Manila time. Settlement of the swapped bonds will be on Jan. 25.
Bureau of the Treasury officials had said the increase in the new money component of the dollar bond issuance—more than the usual $500 million in recent years—would augment the government’s higher infrastructure spending requirements for its ambitious “Build, Build, Build” program.
Economic managers raised the share of foreign borrowings in this year’s financing program on the back of the government’s upcoming foray in the Chinese and Japanese debt markets.
The Cabinet-level Development Budget Coordination Committee raised to 26 percent the share of external borrowings this year from 20 percent previously, while it kept the 80-20 ratio in favor of domestic sources from 2019 to 2022.
Finance Secretary Carlos G. Dominguez III had said 2018 would be a good time to tap global debt markets before the US Federal Reserve hikes interest rates anew.
Designated as joint lead managers for the bond offer were Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Standard Chartered Bank, and UBS AG Hong Kong Branch.