The Philippine government plans to partly finance the redevelopment of a prime property in Shibuya district in Japan through the issuance of samurai bonds later this year.
Finance Secretary Carlos G. Dominguez III told reporters yesterday that the proceeds of the planned samurai bond sale in Japan would cover the cost to redevelop the chancery and the settlement of outstanding yen-denominated loans.
Samurai bonds are yen-denominated IOUs issued in Tokyo by foreigners.
National Treasurer Rosalia V. de Leon told reporters separately that the 2,600-square-meter Shibuya property would be redeveloped, one for the chancery and another for an apartment complex for the staff of the Philippine Embassy in Japan.
“So what we’re contemplating is that it will be financed through a samurai issuance,” De Leon said.
According to De Leon, the government can do a benchmark issue of between $500 million and $700 million in samurai bonds, a portion of which can also be used to finance the budget.
De Leon said the size of samurai bond issuance would still depend on the redevelopment plan, which was expected to be finished before the end of the year.
The proceeds can also be used to pay yen loans, although the volume is small, De Leon said.
“We need yen to pay our debt, so we [can tap the samurai bond market] instead of buying in the market. We can use the proceeds for debt service,” she said.