By Aaron Michael C. Sy, Reporter
THE PHILIPPINE government has raised $2.75 billion (about P163 billion) value of dollar bonds, because it returned to the international capital markets for the primary time in a 12 months.
The triple-tranche dollar bond issuance was the Philippine government’s largest US dollar deal in over three years, the Bureau of the Treasury (BTr) said. The quantity raised was also higher than the initial minimum goal amount of $1.5 billion.
“The exceptional reception for our first international bond issuance of 2026 demonstrates the trust global investors place within the Philippines. Their response affirms the sturdiness of our economic foundation despite difficult market conditions,” Finance Secretary Frederick D. Go said in an announcement.
In keeping with the term sheets, the federal government raised $500 million from the 5.5-year bonds at a coupon rate of 4.25%, about 50 basis points (bps) above the corresponding US Treasury yield (3.847%) but 20 bps below the 70-bp goal spread.
The ten-year paper was the biggest tranche at $1.5 billion. It fetched a coupon rate of 5%, 80 bps above the corresponding US Treasury yield (4.287%) but still 20 bps below the 100-bp goal spread.
Lastly, the federal government raised $750 million from the 25-year papers at a 5.75% coupon, also below the 5.9% goal.
All three tranches of the worldwide bonds were priced with minimal to no latest issue premiums, the BTr said.
“Notwithstanding elevated market volatility and geopolitical uncertainties, the transaction achieved tight pricing, a mirrored image of the Republic’s standing as a benchmark for high-quality emerging market credit and signals robust investor confidence within the country’s credit strength and long-term development trajectory,” National Treasurer Sharon P. Almanza said in an announcement.
The federal government will use the proceeds from the sale of worldwide bonds for general purposes, including budgetary support.
The federal government sold the bonds at a minimum investment amount of $200,000 and denominations of $1,000 thereafter.
The notes will probably be listed on the Luxembourg Stock Exchange Euro multilateral trading facility (MTF), with the settlement date scheduled for Jan. 27.
BofA Securities, Deutsche Bank, HSBC (B&D), JPMorgan, Morgan Stanley, Standard Chartered Bank and UBS were mandated as joint lead managers and bookrunners for the transaction.
The worldwide bonds, which were drawn from the federal government’s existing shelf program, were rated “Baa2” by Moody’s Rankings, “BBB+” by S&P Global Rankings, and “BBB” by Fitch Rankings. These rankings are in step with the Philippine government’s issuer rating.
The newest issuance leaves $2.55 billion in the federal government’s $5.3-billion foreign borrowing plan for the 12 months.
This can also be the Marcos administration’s fourth time tapping the offshore debt market, following a dual-currency issuance of $2.25 billion and €1 billion in January 2025, a $2.5-billion triple-tranche offering in August 2024, and a $2-billion dual-tranche offering in May 2024.
The federal government was capable of time the issuance properly for it to fetch strong demand despite high market volatility, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.
“The timing was sensible. Global markets have been constructive recently, giving the Philippines a clean window to lock in funding before uncertainty picks up. Investors were receptive, recent issuances saw strong demand,” he said.
A trader said in a text message that strong demand likewise allowed the federal government to cost the bonds near the initial guidance.
“Spreads tightened by around 15-20 bps from initial price thoughts, reflecting strong investor appetite despite a volatile global rates backdrop. The ultimate yields were competitive and aligned with market levels, while the standard of demand, particularly from real-money accounts, underscored continued confidence in Philippine sovereign credit.”
Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera likewise said in a Viber message that the strong demand for the bonds is a positive signal of continued investor appetite for Philippine-issued debt, especially amid volatility in global markets and a weak peso.
“Sustaining this demand will depend upon fiscal discipline, credible debt management, and clarity on growth prospects. Investors will watch not only yields but how the proceeds are used and the way macro policies evolve,” he added.
The federal government borrows from local and foreign sources to assist fund its budget deficit, which is capped at P1.647 trillion or 5.3% of gross domestic product this 12 months. Of this, 23% will probably be raised externally.