The Department of Finance (DOF) said the national government is planning to borrow at least $2 billion in the final three months of the year from both domestic and foreign investors.

Finance Secretary Benjamin E. Diokno said the government will launch its latest retail dollar bond this week and they also plan to issue their inaugural Sukuk bonds during the fourth quarter.

“We will launch the Retail Dollar Bonds (RDB) 2 next week, on Sept. 26 to be specific,” Diokno told reporters during his weekly Chat with SBED briefing last Friday, Sept. 22.

Diokno said the Bureau of the Treasury expects to generate an initial $1 billion from this offering, with the possibility of increasing the size if there is high demand.

To attract more investors, the minimum investment requirement for the RDB has been reduced from $300 to $200.

The offer period for the RDB will last two weeks, and the actual sale is scheduled to take place in October.

The Marcos administration faced challenges with the inaugural dollar retail treasury bond sale, which was initially planned for December 2022.

It was subsequently postponed to the second quarter and then rescheduled again to the third quarter due to unfavorable market conditions.

In September 2021, the Philippines successfully conducted its first retail dollar bond sale, raising approximately $1.6 billion or P80.91 billion.

Meanwhile, Diokno also said the Treasury is aiming to sell Sukuk bonds, which are Islamic bonds, within the period of October to December.

To attract more investors and promote business in the country, President Marcos' economic managers recently conducted a roadshow and briefings in the Middle East.

Diokno said the objective of the Middle East roadshow was to promote Sukuk bonds.

“These are Islamic issuances that will diversify the government’s sources of financing, widen our investor base, and boost investments in physical and digital connectivity,” the finance chief said.

Former National Treasurer Rosalia V. de Leon earlier said the government's target is to raise $1 billion through Sukuk bonds before the end of 2023 or early the following year.

She said discussions were underway with potential underwriters to make the necessary preparations, including determining the structure, which could be a hybrid of wakalah, ijara, or murabaha.

Sukuk bonds adhere to Islamic principles and function similarly to regular bonds. However, instead of earning interest, investors receive a share of profits generated from the assets or projects funded by the bonds.

The government plans to issue Islamic notes with five- and ten-year maturities, appealing to both individual and institutional investors, De Leon said.