Philippines seeks at least $1 billion from retail bond offer

September 26, 2023 - 6:19 PM
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The Bureau of Treasury building in Manila, in 2014 file photo. BUSINESSWORLD
  • Price-setting auction for retail dollar bond set for Sept. 27
  • Offer period for 5.5-year retail bond is from Sept. 27 to Oct. 6
  • Philippines plans to raise $1 billion from maiden sukuk issue in Q4

 The Philippine government will try to raise at least $1 billion from an onshore offer of U.S. dollar-denominated retail bonds to be launched this week, Finance Secretary Benjamin Diokno said.

The government also plans to raise at least $1 billion from its maiden sukuk bond issue to be launched likely in the last quarter of 2023, he told reporters.

Manila’s onshore retail dollar bond offer with a 5.5-year maturity is the second of its kind in the Philippines, following the maiden issue in 2021, which raised $1.6 billion.

“There may be a big demand, so maybe we can upsize,” said Diokno.

The offer is an alternative investment product available to Filipinos at a minimum placement of $200, or its peso equivalent, and should help to boost government budgetary support.

Investors will receive coupon payment tax-free, making it “a good investment”, Diokno said.

The Bureau of the Treasury, which will hold a price-setting auction on Sept. 27 for the bond offer, has set the minimum issue size at $200 million, it said in a notice on its website. The offer period is from Sept. 27 to Oct. 6.

The government has held discussions on a potential structure for the sukuk issue, which could carry a five-year or 10-year maturity, the former national treasurer Rosalia de Leon said earlier this month before she was appointed as a member of the central bank’s monetary board.

 — Reporting by Enrico Dela Cruz; Editing by Barbara Lewis and Sam Holmes