THE GOVERNMENT is planning to launch US dollar- or euro-denominated bonds in the initial half of 2025, as stated by the Finance leader.
“[We’ve authorized] a possible dual bond — US dollar and/or euro,” Finance Secretary Ralph G. Recto informed journalists on Tuesday.
He mentioned that the administration aims to gather at least P300 billion from the issuance, which is the standard magnitude for foreign issuances.
The Philippines’ most recent dollar bond issuance occurred in August this year, where it secured $2.5 billion through the release of triple-tranche, US dollar-denominated global bonds.
In September, National Treasurer Sharon P. Almanza announced that the National Government (NG) will not proceed with a planned euro bond issuance for this year.
The National Government last put out euro bonds in April 2021, raising €2.1 billion (P122.4 billion) during the coronavirus pandemic.
The administration still has $500 million to secure from the international debt market this year, in line with its $5-billion external borrowing strategy.
Mr. Recto mentioned on Tuesday that the government intends to issue Sukuk and Samurai bonds next year.
“I believe it’s an ideal moment since the yen is losing value, thus benefiting us. If we borrow from them, their currency is depreciating, you know. However, more significantly, I think you want to capture the attention of investors from Japan,” he stated.
The Philippines last issued Samurai bonds in April 2022, securing ¥70.1 billion.
Mr. Recto indicated that there is also interest from investors in the Middle East.
“Because there’s demand from the Middle East. You want more individuals purchasing our bonds, our notes, and so on. If they’re willing to fund government activities, why not?” he added.
The government first introduced Islamic debt in December 2023, raising $1 billion from the issuance of 5.5-year dollar-denominated Sukuk bonds.
The administration has established its borrowing agenda at P2.55 trillion for 2025, with P507.41 billion anticipated to come from gross external borrowings.
The government could benefit from accessing the foreign debt market next year as the US Federal Reserve’s further loosening is likely to lower borrowing expenses, noted Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort through a Viber message.
Nonetheless, the advantages might be counterbalanced by a strengthening dollar and rising US Treasury yields, Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera remarked in a Viber message.
“Timing is crucial for the issuance as the dollar and the 10-year US Treasury yields continue to ascend. A Trump presidency typically supports the dollar and 10-year yields,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas also stated in a Viber message.
Mr. Rivera added that interest in bond issuances from the Philippines could be tempered due to increased global economic uncertainty stemming from Mr. Trump’s proposed trade tactics and possible tariffs on imports. — Aaron Michael C. Sy