Philippines eyes new global bond sale for 2018
Mary Grace Padin (The Philippine Star) - May 16, 2018 - 12:00am

MANILA, Philippines — The government is planning to raise funds through another dollar-denominated global bond sale this year, according to the Department of Finance (DOF).

Finance Secretary Carlos Dominguez said the government and the Bureau of the Treasury is preparing for the fund raising activity.

He said the issuance may be conducted by the third quarter or early fourth quarter.

However, the finance chief said the volume and the tenor for the new dollar bond issuance has yet to be determined.

Dominguez said proceeds of the sale would be used to finance the government’s programs, particularly its massive infrastructure initiative, and to manage the liabilities and maturing debt of the government.

Last January, the government successfully sold $2 billion worth of 10-year global bonds amid strong investor confidence.

The debt papers were sold at a coupon rate of three percent, tighter than the initial pricing guidance of 3.3 percent. This also had a spread of 37.8 basis points over the US Treasury rate.

Of the total issuance, the DOF said $750 million was allocated to raise fresh money.

Meanwhile, the remaining $1.25 billion was used for a one-day accelerated switch tender offer, which allowed holders of existing US-denominated bonds to swap the debt papers for new bonds or cash.

The government borrows from local and foreign creditors to pay maturing debt and finance its budget deficit, which is targeted at three percent of the country’s gross domestic product (GDP).

Earlier, the Development Budget Coordination Committee (DBCC) also raised the share of foreign loans in the country’s total borrowing mix.

From the previously approved level of 74:26 – in favor of domestic sources – the borrowing mix was adjusted to 65:35.

BONDS DEPARTMENT OF FINANCE
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