PH to issue another $2B in bonds

The Philippines will issue $2 billion in dollar- and yen-denominated bonds before the end of this year in line with recent stance to raise the country’s foreign borrowing program for 2018.

Deputy Treasurer Sharon P. Almanza told reporters recently that the government had programmed commercial borrowings of $4.2 billion this year, of which $2.2 billion were already raised at the start of the year.

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

Also, 1.46 billion renminbi or over $200 billion in three-year panda bonds were issued by the government in China at a “tight” yield of 5 percent last March.

Almanza said the remaining $2-billion commercial borrowings would be “split” between the upcoming samurai bond issuance and the second round of global bond sale eyed later in the year.

The government plans to issue up to $1 billion in yen-denominated samurai bonds in Japan by August, sources said, with a roadshow to promote it scheduled for next month.

Also, Finance Secretary Carlos G. Dominguez III recently announced the government’s plan to embark on another global bond sale by the latter part of the third quarter or early fourth quarter.

The plans, Dominguez had said earlier, were in anticipation of the US Federal Reserve’s moves. The Fed has raised interest rates in March and it is expected to implement three to four more increases within the year.

Almanza said that besides commercial borrowings, the government would also raise $2.5 billion in official development assistance as part of foreign borrowings.

In nominal peso terms, this year’s gross domestic borrowings would reach P640 billion on top of gross external borrowings of P346 billion, Almanza said.

Last month, economic managers increased the share of foreign borrowings to the total financing program in the next five years to finance priority projects and programs.