Philippines eyes foreign debt market next year

MANILA, Philippines — The Philippine government plans to tap various commercial offshore debt markets as part of its borrowing program next year, according to the Department of Finance (DOF).

In an interview, Finance Secretary Carlos Dominguez said the government is looking to issue euro-denominated bonds and British-pound denominated Sterling bonds in 2019.

“We hope to do something in England.  We are getting invitations from some of the ambassadors from Europe to have a roadshow in Frankfurt,” Dominguez said.

Dominguez said he has also ordered the Bureau of the Treasury (BTr) to make a presentation to express the Philippine government’s interest in Norway’s $1 trillion wealth fund.

The Duterte administration is considering issuing US dollar-denominated global bonds in 2019.

Aside from these, Dominguez said the government also intends to make a comeback in the samurai and panda bond markets as early as next year.

“For the samurai, we plan to do it within 12 to 18 months from August. In China, we will come back to the market again within 12 to 18 months from last March,” he said.

 To recall, the government sold 1.46 billion renminbi ($230 million) worth of panda bonds last March. In August, the BTr also raised ¥107.2 billion ($1.39 billion) worth of samurai bonds.

The national government intends to increase its borrowing program to P1.19 trillion in 2019 from this year’s P986 billion.

National Treasurer Rosalia De Leon said this was in anticipation of the higher fiscal deficit programmed by economic managers for 2019.

 The Development Budget Coordination Committee earlier raised the government’s fiscal deficit ceiling to P624.73 billion for 2019, equivalent to 3.2 percent of the gross domestic product.

According to the Treasury, P297.2 billion ($5.504 billion) of the total amount to be borrowed next year will be sourced from external lenders. This is 14.1 percent lower than this year’s P346 billion.

The remaining P891.7 billion under the 2019 borrowing program will come from domestic lenders.

 Dominguez said the national government is still planning to issue US-dollar denominated global bonds this year as part of its pre-funding efforts.