Philippines raises over P24 billion from Samurai bonds
MANILA, Philippines — The Philippines on Tuesday announced raising 55 billion yen (P24 billion) from the sale of yen-denominated bonds.
The cash came from the issuance of 3-year Samurai bonds to investors, the Bureau of the Treasury said. The papers were charged with zero coupon, which means the government will not be paying interest for borrowing.
The offer was priced 21 basis points above the benchmark, said to be the “tightest spread” for this kind of bonds since 2018. Investor demand was also healthy, prompting the government to hike its offer size to 55 billion yen from the original 30 billion yen.
Proceeds, which are expected to be credited on April 13, are expected to finance state operations, including COVID-19 response. Fiscal planners hailed the “successful” bond offer as proof that the Philippines continues to receive strong reception from foreign investors despite the current pandemic turmoil.
“The Philippines’ successful return to the Japanese bond market at this precarious time underlines the continued investor confidence in our economy…,” Finance Secretary Carlos Dominguez III said in a statement.
National Treasurer Rosalia de Leon agreed. “This landmark transaction highlights the government’s capability to respond to challenging times with creative solutions to free up fiscal space to augment the National Government’s COVID-19 response,” she said in the same statement.
The Philippines has been turning to more debt to bridge a record budget deficit resulting from falling tax receipts and hefty spending to counter the health crisis’ impact. A day before the Samurai bond offer, the Treasury reported a record-high debt pile of P10.4 trillion as of end-February.
That said, as a proportion of total economic resources, government’s debt remained relatively healthy, accounting for 54.5% of gross domestic product in 2020. This debt ratio was the highest since 2006, but nonetheless have stayed at a manageable level. — Prinz Magtulis
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