MANILA, Philippines — The Philippines is tapping anew the global bond market with a dual-tranche dollar bond offering worth about $3.5 billion, as the government seeks to raise funds for general budget financing and sustainability projects.
This marks the first offshore debt offering under the Marcos administration this year.
According to a report in the International Financing Review (IFR), a capital markets publication, the issuance includes a 10-year conventional bond marketed at Treasuries plus 120 basis points and a 25-year sustainability note with an indicative yield of 6.1 percent.
Both tranches are registered with the Securities and Exchange Commission and have been rated by global debt watchers.
“Proceeds will be used for general budget financing, with the 25-year sustainability tranche also used to refinance assets in line with the issuer’s sustainable finance framework,” the IFR said.
Citigroup Inc., Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Standard Chartered and UBS have been assigned as joint lead managers and joint bookrunners.
Moody’s Investors Service gave the notes a senior unsecured rating of Baa2, which mirrors the Philippine government’s issuer rating.
S&P Global Ratings assigned a BBB+ long-term foreign currency rating to the dollar senior unsecured notes to be issued by the Philippines, while Fitch Ratings gave the issuance a BBB rating.
Finance Secretary Ralph Recto earlier said the Philippines is expecting to raise $3.5 billion through global bond issuances within the first half of the year.
The government is targeting to borrow P2.55 trillion this year, with 80 percent of the borrowings sourced domestically and the remaining 20 percent from offshore investors.
Last year, the Marcos administration borrowed $4.5 billion from the global debt market. Broken down, the initial $2 billion was secured via a dual-tranche global bond in May 2024. Another $2.5 billion was secured in August last year.
Latest data from the Bureau of the Treasury showed that the national government’s total outstanding debt went up by 10.6 percent to a record high of P16.02 trillion in end-October 2024 from P14.48 billion a year ago.
Domestic debt rose by 10 percent to P10.89 trillion in end-October last year from P9.9 trillion in the same period a year ago. Foreign obligations, on the other hand, jumped by 12.1 percent to P5.13 trillion from P4.58 trillion.