Philippine raises $2.75 billion from global bonds

Proceeds for budget funding, debt refinancing  

MANILA, Philippines —  The Philippines raised a total of $2.75 billion from its return to the global bond market after pricing a triple-tranche dollar offering that drew strong investor demand and locked in funding across the medium to long end of the curve.

Based on the final term sheets released yesterday, the Bureau of the Treasury priced $500 million of 5.5-year global bonds due 2031, $1.5 billion of 10-year bonds due 2036 and $750 million of 25-year bonds due 2051.

All tranches were issued as senior unsecured bonds and will settle on Jan. 27.

The 5.5-year tranche carries a 4.25 percent coupon and was priced at 99.53 percent, resulting in proceeds of about $497.65 million before expenses. The bonds have a re-offer yield of 4.347 percent and were priced at a spread of 50 basis points over the benchmark US Treasury.

The 10-year notes were issued with a five percent coupon and a public offering price of 99.325 percent, generating roughly $1.49 billion in proceeds before expenses. The re-offer yield stood at 5.087 percent, or 80 basis points over the benchmark.

Meanwhile, the longest 25-year tranche was priced at par with a 5.75 percent coupon, raising $750 million. The bonds carried a re-offer spread of 83.3 basis points over the reference US Treasury and a re-offer yield of 5.75 percent.

The global bonds are rated investment grade, with Moody’s assigning a Baa2 rating, S&P Global Ratings giving a BBB+ rating and Fitch Ratings rating the bonds BBB.

The transaction marked the Philippines’ first offshore bond sale for 2026 and followed a series of successful issuances in recent years.

This includes a dual-currency $2.25 billion and €1 billion deal in January 2025, a $2.5 billion triple-tranche offering in August 2024 and a $2 billion dual-tranche issuance in May 2024.

Proceeds from the bond sale will be used for general budget financing, including budgetary support and the refinancing of existing obligations, the Treasury earlier said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the issuance attracted strong investor interest, with total bids reaching about $5.95 billion, more than double the $2.75 billion actually awarded.

He noted that the bonds were priced at lower borrowing costs and tighter spreads than initially guided, which he said was “a good signal for the country’s credit.”

Ricafort said the timing was favorable as global spreads have generally narrowed, helping support demand for emerging market sovereign paper.

He added that the Philippines continues to benefit from its positioning as a relatively safe investment among sovereign issuers, with credit ratings one to three notches above the minimum investment-grade level.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the government chose an opportune window to access global markets, citing constructive conditions that allowed the Philippines to lock in funding before uncertainty increases.

“Investors were receptive, recent issuances saw strong demand.  So tapping markets now allows the government to secure cheaper, longer-term financing while sentiment is still in our favor,” Ravelas said.

Bank of America Securities, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley, Standard Chartered Bank and UBS served as joint lead managers and joint bookrunners for the transaction.

The successful $2.75 billion fund-raising reinforces the Philippines’ access to global capital markets as it continues to finance the budget and manage its debt portfolio amid ongoing fiscal consolidation efforts.