THE Philippine government is eyeing to borrow at least $1 billion by offering benchmark-sized US dollar-denominated global bonds.
The Philippines is set to sell 10.5-year and 25-year dollar bonds in a bid to obtain more funds for the country’s budgetary support amid the prolonged pandemic.
This marks the third time that the government is tapping the offshore bond market this year after it sold euro-denominated bonds and Samurai bonds earlier this year.
With the tenors at benchmark-size, the Philippines is targeting to raise at least $500 million for each of the two tenors of dollar bonds.
The dollar bonds, which have a settlement date of July 6, 2021, are set to mature on January 6, 2032 and July 6, 2046.
The dual-tranche bond offering is expected to be rated Baa2 by Moody’s Investors Service, BBB+ by S&P Global Ratings and BBB by Fitch Ratings.
Finance Secretary Carlos G. Dominguez III earlier said the government was planning to sell dollar bonds “before rates skyrocket.”
In March this year, the Philippine government borrowed ¥55 billion ($500 million or about P24.2 billion) through its issuance of three-year zero-coupon Samurai bonds.
The government also borrowed 2.1 billion euros ($2.53 billion or about P122.4 billion) when it sold its first-ever triple-tranche euro-denominated bonds in April this year.
Last year, the government successfully returned to the dollar bond market twice, raising $2.35 billion in April and another $2.75 billion in December.
For this year, the national government has set a P3.03-trillion borrowing program. Eighty percent of the amount is programmed to be raised through domestic sources while the remaining 20 percent is expected to come from foreign sources.
The national government’s total outstanding debt continued to swell to a fresh record-high of P10.991 trillion in April this year as the country resorts to more borrowings to finance its pandemic response. This was up by 2 percent from P10.77 trillion reported at the end of the year’s first quarter and it was also a 27.8-percent jump from P8.6 trillion of end-April last year.
Dominguez has also said they expect the country’s debt-to-GDP ratio this year to reach 58.7 percent. This is below the 60-percent international threshold but higher than the country’s 14-year-high debt-to-GDP ratio last year at 54.6 percent.