The Marcos administration completed its first overseas bond sale for the year to help bridge the budget deficit and support initiatives for protecting natural resources, the Department of Finance (DOF) said.
In a statement released on Wednesday, May 8, the DOF announced that Manila successfully secured $2 billion in new loans by issuing dual-tranche US dollar bonds to foreign creditors.
Broken down, the government raised $1 billion from the 10-year debt securities and another $1 billion from the 25-year sustainability notes.
Despite heightened market volatility, Finance Secretary Ralph G. Recto said that Manila secured funding at highly competitive rates, resulting in substantial savings on borrowing costs for the government.
Recto pointed out that the 10-year spread was the most favorable since 2022 among similar issuances, and the 25-year sustainability tranche achieved the second-best rate in the government's record.
“The tight pricing, especially compared to higher-rated peers, serves as an indication of the country’s exceptional performance beyond its current credit rating and makes a good case for a rating upgrade,” Recto said.
The newly issued 10-year notes were priced at T+80 basis points, a tightening of 40 basis points from the initial price guidance.
Similarly, the new 25-year Sustainability tranche was priced at 5.60 percent at par (T+99.8 bps), a 45-basis-point decrease from the initial price guidance.
Recto said the offering’s success showcased the Philippines’ capacity to navigate a volatile policy rate environment and adeptly capitalize on favorable market conditions.
“Proceeds of this issuance will be directed towards the overall welfare of all Filipinos—more infrastructure projects, improved social services, a better healthcare system, and quality education for them,” he added.
This transaction comes after a series of bond issuances by the Philippines, including a $1 billion 5.5-year Sukuk in December 2023 and a $3 billion triple-tranche bond offering in January 2023.
In 2022, the government also sold a $2 billion triple-tranche bond, a JPY 70.1 billion four-tranche Samurai bond, and a $2.25 billion triple-tranche bond