PH raises $2B from first global bond offering in 2024

The Philippine government raised $2 billion from its return to the international capital markets earlier this week, its first global bond offering for the year, the Department of Finance (DOF) reported Wednesday.

According to the DOF, the 10-year debt securities due 2034 were priced at US Treasuries plus 80 basis points, reflecting a tightening of 40 basis points from the initial price guidance.

The 25-year sustainability bonds maturing in 2049 were priced at the 5.60% area, which was 45 basis points tighter than the initial price guidance of 6.05%.

“We secured funding from the market at very cheap rates, which allowed us to save on borrowing cost,” Finance Secretary Ralph Recto said in an emailed statement.

“The tight pricing, especially compared to higher-rated peers, serves as an indication of the country’s exceptional performance beyond its current credit rating and makes a good case for a rating upgrade,” he added.

Recto said proceeds of the issuance will be used for infrastructure projects, social services, the improvement of the country’s healthcare system, and quality education.

Proceeds from the 25-year bonds will also be allocated for refinancing programs and expenditures in line with the country's Sustainable Finance Framework.

“The strong reception and record tight pricing levels attained on this transaction reaffirm the Philippines' position as a true watermark for quality emerging market credit stories, and the success of the offering in the face of various market uncertainties over the past few months shows the continued confidence of the broader investor community in the progress of our economic development,” National Treasurer Sharon Almanza said.

The dual-tranche bonds were rated “BBB” by Fitch Ratings, “Baa2” by Moody’s Ratings, and “BBB+” by S&P Global Ratings, equivalent to their ratings for the country’s sovereign debt.—LDF, GMA Integrated News