THE Department of Finance (DOF) has confirmed that five Japanese banks have given their support and full backing to the Philippines’s first stand-alone yen-denominated samurai bonds issue set in the third quarter of this year.
In separate meetings with Finance Secretary Carlos G. Dominguez III in Tokyo, Japan, top officials of Japan’s five largest banks—the Mitsubishi UFJ Financial Group (MUFG), Nomura Holdings Inc., Mizuho Bank Ltd., Sumitomo Mitsui Banking Corp. (SMBC) and Daiwa Securities Group Inc.—said they expect strong demand for the Philippines’s samurai bond float, the first since the last one issued in 2010.
In their meeting with Dominguez, officials of MUFG, led by its President and CEO Saburo Araki, said there is “strong confidence in the Philippines now and into the future” among Japanese investors.
“We are extremely supportive of the bond issue…. We are very excited and pleased for the inauguration or possible issuance,” Araki said.
Araki also cited the good relationship between Japan Prime Minister Shinzo Abe and President Duterte as a positive factor in winning investors for the samurai bond issue.
MUFG, which is among the leading institutions when it comes to project financing, said it would like to get involved in the Philippines’s “Build, Build, Build” (BBB) program, with Araki saying he believes “infrastructure development is a key for the future success of the Philippines.”
Nomura Holdings, led by its President Koji Nagai, told Dominguez that the bank has an exemplary track record in selling samurai bonds and would strive to maximize the Philippines’s issue and “capture the most favorable conditions.”
Tatsufumi Sakai, the Group CEO of Mizuho Bank Ltd., cited the Philippines’s recent investment-level ratings upgrades, its strong economy and young skilled work force as plus factors for the samurai bond issuance and the continued interest of Japanese investors in the country.
“Not only the government, but also the private sector, wants to invest in your country…. By collaborating government and private-sector partnership, we can do a lot,” Nagai said.
Daiwa Securities Group Inc. CEO Seiji Nakata assured Dominguez of the institution’s support for the samurai bond issue.
“We are right behind you, so no need to worry. We can expect a strong demand. And of course, now the investors are looking for places to invest. Now for samurai bonds, there will be strong demand,” Nakata said.
SMBC President and group CEO Takeshi Kunibe said the strong leadership in the Philippines and the expansion of the Philippine economy have made the country very popular among Japanese investors.
Kunibe said SMBC, which was also among the organizers of the Philippine Economic Briefing (PEB) held at the Imperial Hotel in Japan, said the bank is also looking forward to “a successful deal” on the Philippines’s samurai bond issue.
The PEB, which laid out the Duterte administration’s plan to sustain the Philippines’s status as one of the fastest-expanding economies in Asia and its programs for inclusive growth, also set the groundwork for the deal road show that the government will roll out for its samurai bonds issue, according to Dominguez.
The Tokyo visit of the Philippine delegation from June 18 to 21, includes the PEB and the fifth regular meeting of the Philippines-Japan High-Level Committee on Infrastructure and Economic Cooperation, the DOF said.
In 2010 when the Philippine government raised funds through the float of samurai bonds, the Japan Bank for International Cooperation (JBIC) guaranteed the bond issue through its Market Access Support Facility, which was established to assist Asia’s developing countries in accessing international capital markets following the global financial crisis of 2008.
Since 1978 the Philippines through private banks floated bonds in the Japanese market with seven samurai bond issues. The eighth in 2010 was issued by the Philippine government with JBIC support.
The ninth bond issuance set this year with no guarantee fees involved would mean lower financial costs for the Philippine government. The finance chief 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.