Philippines eyes US$2 billion in its first global bond this year

THE Philippines is looking to raise as much as US$2 billion from a two-part dollar bond sale on Tuesday (May 7), its first trip to the international market this year, according to Finance Secretary Ralph Recto.

The offer is part of a plan to raise about US$5 billion in funding from overseas markets for 2024, Recto said in a mobile phone reply to queries. 

The South-east Asian nation’s proposed sale of 10-year and 25-year debt comes during the busiest day for global bond issuance in Asia outside Japan since June 2023. At least four other borrowers have lined up offerings.

“I expect our rates/spreads to be better than our credit rating. So far, the rates seem to be okay,” Recto said. The Philippines is rated BBB+ by S&P Global Ratings, Baa2 by Moody’s Ratings and BBB by Fitch Ratings, all investment grade.

The country has been breaking with the practice of tapping the market early in the year, opting instead to look for a window of opportunity to issue new debt. It has some US$774 million of bonds due in September and another US$1 billion notes due in October.

In 2023, the Philippines made two ventures into the international dollar bond market, with a US$3 billion three-part deal in January that year and another US$1 billion in its first Islamic note in November. 

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The sovereign issuer is looking to fund a budget deficit of about US$26 billion this year and spur an economy that’s one of the fastest growing in Asia. BLOOMBERG