PH raises $1B from maiden ‘sukuk’ bond sale | Inquirer Business

PH raises $1B from maiden ‘sukuk’ bond sale

MANILA  -The Philippines raised $1 billion from its maiden “sukuk” bonds sale, marking its successful debut in the Islamic debt market.

In a statement on Thursday, the Bureau of the Treasury (BTr) said the offer was “met with strong demand” after attracting orders that exceeded the original size of the issuance by 4.90 times.

The Islamic bonds are payable in 5.5 months. The BTR said the robust appetite for the debt securities helped the government lock in cheaper borrowing.


The sukuk bonds were priced at T+80 basis points (bps), with a profit rate of 5.045 percent, representing a 35-bp compression from the initial price guidance of T+115 bps.


The government plans to use the fresh debt “for general purposes, including but not limited, to budgetary support”.

Sukuk is a form of financing that is compliant with Islamic religious law that prohibits the earning of interest.

Unlike traditional bonds, sukuk allows investors to have a share in the ownership of an asset with actual value rather than holding debt securities and earning from interest payments. According to the BTr, the Philippines’ offer utilized real estate assets under “Ijara” and “Wakala”, together with a “Commodity Murabaha” aspect.

The landmark issuance marked a significant step in the government’s agenda to promote and develop Islamic banking and finance in the country. It also allows the state to diversify its global investor base.

“We hope this transaction will create positive momentum for Islamic banking and finance in the Philippines, and we look forward to the active participation of all stakeholders,” Finance Secretary Benjamin Diokno said.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

TAGS: “Sukuk” bonds, Bureau of the Treasury, strong demand

© Copyright 1997-2024 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.