The Department of Finance (DOF) said the national government's borrowing from local and foreign investors through the sale of debt papers demonstrated investor confidence in the Marcos administration.

In a statement on Monday, Dec. 18, the DOF boasted President Marcos' multi-billion peso domestic and offshore borrowings, now contributing to the national government's hefty P14.48 trillion debt as of the end of October.

The DOF's top item is the issuance of $3 billion, approximately P166.98 billion, in 5.5-year, 10.5-year, and 25-year US dollar-denominated global bonds in January.

The DOF said the 5.5-year and 10.5-year global bonds were priced at 105 basis points (bps) and 145 bps above similar tenor US Treasuries, with coupon rates of 4.62 percent and five percent, respectively.

These coupon rates are 50 basis points lower than the initial price guidance of 155 bps area and 195 bps area, respectively.

Meanwhile, the 25-year Sustainability bond was priced at 5.50 percent at par, 45 bps lower than the initial price guidance of 5.95 percent area.

Before the end of 2023, the Marcos administration also broadened its funding sources to attract Middle Eastern and Islamic investors by issuing its first Sukuk bonds.

This involved using real estate assets under Ijara and Wakala structures, and adding a Commodity Murabaha element.

The issuance, amounting to $1 billion, or around P55.67 billion in 5.5-year Sukuk, carried a rate of 5.04 percent, priced at 80 bps above US Treasuries.

The order book saw a peak oversubscription of 4.90 times, and 30 percent of the certificates were bought by Middle Eastern investors, demonstrating the country’s success in accessing the Islamic market.

Finance Secretary Benjamin E. Diokno said the Sukuk issuance is a crucial move in the Marcos, Jr. administration’s efforts to develop the Philippine financial sector and tap into the potential of Islamic banking, expanding the investor pool.

Domestically, the government successfully sold the 29th tranche of the Retail Treasury Bond (RTB 29) in February, raising P283.71 billion within the nine-day offer period and surpassing its target volume ahead of schedule.

Throughout the nine-day offer period, daily orders averaged P130 billion.

Similarly, the second tranche of the Retail Dollar Bond (RDB 2), issued in October, also experienced robust demand.

RDB 2 raised a total of $260 million, approximately P70.14 billion, which was over six times the initial target of $200 million.

“The overwhelming support we’ve received from both RTB 29 and RDB 2 allowed the National Government to raise a total of PHP 355.57 billion, which comprises 21.50 percent of the government’s annual domestic funding program,” Diokno said.

The following month, the Bureau of the Treasury issued the Philippines' first Tokenized Treasury Bonds (TTBs)  in November.

TTBs are designed to encourage more people to participate in the bond market and promote greater financial inclusion.

Qualified institutional investors showed strong interest, with the book size reaching PHP 31.426 billion, over three times the target issue size of P10 billion.

As a result, the Treasury increased the issue to P15 billion at 6.50 percent, matching the prevailing 1-year secondary market rates, even though the TTBs are not tradable.

“Capping off 2023 with strong demand and investor appetite for our issuances, we are optimistic of even stronger investor confidence in 2024,” Diokno said.

“These financing efforts will not only boost economic development but also encourage ordinary Filipinos to start investing in safe and stable sources of passive income,” he added.