The Marcos administration has launched a three-tranche US dollar-denominated bond offering, marking its second foray into the international debt markets this year.

According to a report from Moody's Ratings, the bonds will mature in 2030, 2035, and 2049. Notably, a portion of the 25-year debt is earmarked for projects that align with the country’s sustainable finance framework.

The funds raised from this bond issuance will be used to support general budget support and to facilitate the financing or refinancing of government initiatives, Moody's said.

To recall, the government successfully raised $2 billion in May from offshore capital markets through the sale of dual-tranche debt securities. 

The 10-year bonds, maturing in 2034, were priced at US Treasuries plus 80 basis points, demonstrating a tightening of 40 basis points from the initial price guidance. 

Meanwhile, the 25-year sustainability bonds, set to mature in 2049, were priced in the 5.60 percent range, reflecting a 45 basis point improvement from the initial guidance of 6.05 percent.

In the first half of the year, the government’s foreign borrowings fell by 27 percent from P366.44 billion to P267.4 billion. 

The largest share of external financing came from the sale of global bonds, which raised P115.25 billion, followed by program loans of P100.5 billion and project loans totaling P51.67 billion from the country’s development partners.

In contrast, borrowings from domestic creditors increased by 27 percent to P1.303 trillion by the end of June from P1.024 trillion in the same period last year. 
The majority of these domestic borrowings were in the form of fixed-rate treasury bonds, with the government issuing P609.21 billion in long-term IOUs.

Additionally, in February, the government generated P584.86 billion from small Filipino investors through the sale of retail treasury bonds. It also secured another P109.07 billion through regular treasury bill auctions in the first half of the year.

The government's gross borrowings by the end of June accounted for 61 percent of the Marcos administration's full-year 2024 borrowing program, which totals P2.57 trillion.