Philippines eyes $3.5 billion from global bond sales

MANILA, Philippines — The Philippines is looking to raise $3.5 billion this year through the issuance of global bonds, predominantly in dollars, as the country continues to balance its borrowing strategy between international markets and abundant domestic liquidity.

On the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland, Finance Secretary Ralph Recto said the government plans to access the international capital markets this year.

“We’re only looking at tapping something like $3.5 billion this year,” Recto said in an interview with Bloomberg TV. “There will be some euro-denominated issuances, but the majority will be in dollars.”

The finance chief said the global bond sales are anticipated within the first half of the year. He confirmed that the Bureau of the Treasury is already working with eight banks for these bond issuances.

However, Recto said approximately 80 percent of the government’s borrowings would remain locally sourced.

“There’s a lot of domestic savings in the Philippines. There’s a lot of liquidity. It’s even cheaper for us to borrow domestically,” he said.

Last year, the Marcos administration raised $2.5 billion from the international debt market through two separate issuances in May and August.

Meanwhile, the government is preparing to implement new tax measures this year to bolster revenues, particularly in anticipation of higher-for-longer policy moves by the US Federal Reserve.

Recto expects these measures to generate around P300 billion over four years, contributing to deficit reduction.

The Philippines is also expected to remain resilient amid tariff and immigration policies that US President Donald Trump may implement.

According to Recto, inflation and interest rates could be affected by Trump’s policies, especially if he imposes steep tariffs that may drive prices higher.

“There is uncertainty on what he plans to do with regard to tariffs and inflation. Of course, if tariffs are imposed and inflation goes up, then interest rates may not go down as much as we want it to,” he said.

Recto, who is also a member of the Monetary Board, said the Bangko Sentral ng Pilipinas could lower interest rates by 50 to 75 basis points this year.

Addressing currency concerns, the finance chief said the peso’s depreciation against the dollar reflects the greenback’s strength rather than domestic economic weakness.

“The Philippine peso will more or less depreciate by about five percent because the dollar is very strong because interest rates have been going up,” Recto said.

“But we’re not so concerned about where the peso will be going. Let the market forces determine that. So we don’t really have a number. We intervene in the market only if it’s very volatile. Just to flatten the curve,” he said.