Courting Japan: Manila set on $1-billion samurai bonds

In Photo: Finance Secretary Carlos G. Dominguez III delivers a speech during the Philippine Economic Briefing in Tokyo, Japan, on June 19. The event was attended by about 600 investors, Japanese government high-ranking officials and the Philippines’s top officials.

FINANCE Secretary Carlos G. Dominguez III confirmed on Tuesday that the Philippines plans to issue around $1-billion samurai bonds this year, following its two successful floats of dollar- and renminbi-denominated securities in the offshore markets in the first quarter of 2018.

“This year we are also planning to issue around $1 billion worth of samurai bonds,” Dominguez told Japanese businessmen during his opening remarks at the Philippine Economic Briefing (PEB) held at the Imperial Hotel in Tokyo, Japan.

Buoyed by the tight spreads of the Philippines’s earlier bond issuances this year, Dominguez said such developments “indicate confidence in the fiscal and debt management of the Duterte administration.”

In showcasing the Philippines’s vibrant economic prospects, the finance chief recalled that when the government issued $2 billion worth of 10-year global bonds in January, its spread was 37.8 basis points over the United States Treasuries, while its maiden “Panda” bond float of 1.46 billion renminbi in March had an even tighter spread of only 35 basis points over the benchmark.

The finance chief gave no other details of the planned yen-denominated bond float, but said earlier that the government will proceed with the issuance by September or October of 2018.

This year’s PEB, which showcases the Philippines’s economic resilience amid its goal of spurring infrastructure development to achieve inclusive growth, is the second held in this Japanese capital since last year.

In his remarks, Dominguez said bilateral relations between the Philippines and Japan have emerged closer and stronger these past few years as the former rises to join the elite group of Asia’s tiger economies, fueled by its long-term goal to achieve zero poverty rates in about two decades from now.

To date, Japan has been the Philippines’s major source of official development assistance (ODA) in terms of infrastructure support, one of its top trading partners, and its fourth largest source of foreign tourists, according to Dominguez.

As the Philippines continues to institute reforms both in the economic and peace and order fronts to sustain its growth momentum, Dominguez assured the Japanese business community that the government during the watch of President Duterte will continue to further open the economy to investors and “improve the ease of doing business, respect the sanctity of contracts and promote a more conducive climate for investments.”

He added, “As we modernize our infrastructure and accelerate our growth, we look forward to increased investment flows from Japanese companies. We are impressed with the commitment to excellence that imbues your corporate culture. We hope to benefit from the transfers of technology that invariably tracks investment flows.”

Joining Dominguez at the briefing were Socioeconomic Planning Secretary Ernesto M. Pernia, Budget Secretary Benjamin E. Diokno and Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr.

To date, Japan has formalized a total of about $1.25 billion in loans and grants for
the Philippines.

On top of providing ODA financing for these projects, Japan is also the Philippines’s second major trading partner, with total bilateral trade at $20.8 billion in 2017.

Japan is also the fourth-largest source of tourists for the past three years. In 2017 some 584,000 Japanese visited the Philippines, an increase of 9 percent over the previous year.

According to Dominguez, the government is revisiting its Foreign Investments Negative List to open more areas for joint ventures and direct investments, reviewing its procedures to reduce red tape and shorten approval time for business start-ups, and exploring possibilities for expanded e-governance using digital technologies.





Image credits: PCOO OSEC Media


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