THE GOVERNMENT wants to spend US dollars or eurosnominated bonds in the first half of 2025, the treasury chief said.
“[We’ve approved] a potential dual bond – US dollar and/or euro,” Treasury Secretary Ralph G. Recto told reporters on Tuesday.
He added that the government will try to raise at least P300 billion from the issuance, which is the benchmark size of foreign issuances.
The Philippines’ last dollar bond issuance took place in August this year. It raised $2.5 billion from issuing US dollar-denominated global bonds in three tranches.
In September, National Treasurer Sharon P. Almanza said the National Government (NG) will no longer proceed with a planned issuance of Eurobonds this year.
The national government last issued Eurobonds in April 2021, raising 2.1 billion euros ($122.4 billion) during the coronavirus pandemic.
The government still needs to raise $500 million from the international debt market this year from its $5 billion external borrowing plan.
Mr Recto said on Tuesday that the government also plans to issue Sukuk and Samurai bonds next year.
“I think it’s a good time for the yen to depreciate, so that’s good for us. If we borrow from them, they become less valuable, you know. But more importantly, I think you want 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 is also demand from Middle Eastern investors.
“Because there is an appetite from the Middle East. You want more people to buy our bonds, our notes, and so on. If they are willing to finance the boardoperations, why not?” he added.
The government issued its first Islamic debt issue in December 2023, raising $1 billion from the sale of 5.5-year dollar-denominated Sukuk bonds.
The government has set its 2025 borrowing program at €2.55 trillion, of which €507.41 billion will come from gross external borrowing.
The government could benefit from tapping the foreign debt market next year as further U.S. Federal Reserve easing is expected to lower borrowing costs, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. in a Viber message.
However, the benefits could be offset by a stronger dollar and higher U.S. Treasury yields, John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.
“Timing is critical to the issuance as U.S. Treasury and 10-year Treasury yields continue to rise. A Trump presidency will support the dollar and 10-year yields,” said senior adviser Jonathan L. Ravelas of Reyes Tacandong & Co. also in a Viber message.
Mr. Rivera added that demand for bond issues from the Philippines could be dampened due to increased global economic uncertainty from Mr. Trump’s proposed trade policies and possible tariffs. — Aaron Michael C. Sy