THE GOVERNMENT is seeking to issue US dollar- or euro-denominated bonds in the primary half of 2025, the Finance chief said.
“[We’ve approved] a possible double bond — US dollar and/or euro,” Finance Secretary Ralph G. Recto told reporters on Tuesday.
He added the federal government will look to lift at the least P300 billion from the issuance, which is the benchmark size of foreign issuances.
The Philippines’ last dollar bond issuance was in August this yr. It raised $2.5 billion from the issuance of triple-tranche, US dollar-denominated global bonds.
In September, National Treasurer Sharon P. Almanza said the National Government (NG) will not push through with a planned euro bond issuance this yr.
The National Government last issued euro bonds in April 2021, raising €2.1 billion (P122.4 billion) amid the coronavirus pandemic.
The federal government has $500 million yet to be raised from the international debt market this yr from its $5-billion external borrowing plan.
Mr. Recto on Tuesday said the federal government can also be planning to issue Sukuk and Samurai bonds next yr.
“I believe it’s an opportune time that the yen is depreciating so it’s favorable for us. If we borrow from them, they’re depreciating, . But more importantly, I believe you would like to be on the radar screen of investors from Japan,” he said.
The Philippines last issued Samurai bonds in April 2022, raising ¥70.1 billion.
Mr. Recto said there may be also demand from Middle East investors.
“Because there’s an appetite from the Middle East. You would like more people buying our bonds, our notes, and so forth and so forth. In the event that they’re willing to finance government operations, why not?” he added.
The federal government first issued Islamic debt in December 2023, raising $1 billion from the sale of 5.5-year dollar-denominated Sukuk bonds.
The federal government set its borrowing program at P2.55 trillion for 2025, of which P507.41 billion will come from gross external borrowings.
The federal government may gain advantage from tapping the foreign debt market next yr because the US Federal Reserve’s further easing is predicted to cut back borrowing costs, Rizal Industrial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Nonetheless, the advantages might be offset by a stronger dollar and better US Treasury yields, Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
“Timing is vital within the issuance because the greenback and the 10-year US Treasury yields proceed to rise. A Trump presidency is supportive of the greenback and 10-year yields,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas likewise said in a Viber message.
Mr. Rivera added that demand for bond issuances from the Philippines might be dampened on account of heightened global economic uncertainty brought by Mr. Trump’s proposed trade policies and potential tariffs on imports. — Aaron Michael C. Sy
