PH considering samurai, dollar bonds

The Philippines is considering rolling out samurai bonds and a return to the dollar bond market later this year as it seeks to raise $3 billion more for its 2024 borrowing program, Finance Secretary Ralph Recto said Monday.

According to Recto, the government plans to borrow $5 billion this year, of which it has already raised $2 billion, leaving a balance of $3 billion which will be raised in the latter part of the year.

“On the samurai bonds, the first mandate of the Department of Finance and the Treasury is to ensure that if we have to borrow, we borrow at the lowest rate possible,” he said during the EJAP-SMC Economic Forum in Manila City.

“Yes, we’re considering samurai bonds, but we’re timing also the market… Not only samurai bonds, but also dollars,” he added.

Sought for additional details on the planned borrowing, Recto said the timing would be based on the widely anticipated monetary policy easing in the United States and across the globe.

“It depends on the Fed or global markets. Once they start reducing their rates, then that would be an opportunity to borrow,” he said, adding that he expects “both dollar and samurai bonds, so both are being considered.”

Latest data available from the Bureau of the Treasury (BTr) showed that the Philippine sovereign debt stock stood at P15.347 trillion as of end-May, reflecting a 2.2% increase or P330.39 billion higher than the P15.017 trillion as of end-April.

The BTr attributed the increase to the impact of local currency depreciation on the valuation of foreign-currency denominated debt, with the peso hitting P58.524:$1 as of end-May.

The latest debt stock was composed of 68.04% domestic debt with P10.442 trillion, while 31.96% or P4.904 trillion was external debt.

In terms of rolling out more retail bonds this year, Recto said he will have to consult with the BTr after the country raised P585 billion or $10.5 billion from the sale of small-denominated treasury bonds, the fourth retail bond offer under the administration of President Ferdinand “Bongbong” Marcos Jr.

“We had a successful retail offering early part of the year, so I’ll consult with the Treasurer on that. On the details, ang alam ko wala pang plano (there are no plans yet) this year,” he said.

The DOF in January said it would be relying heavily on the domestic front to finance the P2.46-trillion total borrowing requirement for the year which increased from P2.207 trillion in 2023.—AOL, GMA Integrated News