Gov’t mulls issuance of $1-B ‘Samurai’ bond

Secretary Carlos Dominguez III confirmed here Tuesday that the Philippines is planning to issue about USD1 billion-worth of “Samurai” bonds this year following its two successful floats of dollar- and renminbi-denominated securities in the offshore markets in the first quarter of 2018.

Buoyed by the tight spreads of the Philippines’ earlier bond issuances this year, Dominguez said such developments “indicate confidence in the fiscal and debt management of the Duterte administration.”

In showcasing the Philippines’ vibrant economic prospects, Dominguez recalled that when the government issued USD2 billion-worth of 10-year dollar denominated bonds in January, its spread was 37.8 basis points (bps) over the US Treasuries, while its maiden “Panda” bond float of 1.46 billion renminbi in March had an even tighter spread of 35 bps over the benchmark.

“This year, we are also planning to issue around USD1 billion worth of ‘Samurai’ bonds,” Dominguez told Japanese businessmen during his opening remarks at the Philippine Economic Briefing (PEB) held at the Imperial Hotel here.

The finance chief gave no other details of the planned yen-denominated bond float in his speech, but he has said earlier that the government will proceed with it by September or October of 2018.

National Treasurer Rosalia de Leon also quoted the same amount of “about USD1 billion” in an earlier interview with reporters.

This year’s PEB, which showcases the Philippines’ economic resilience amid its goal of spurring infrastructure development to achieve inclusive growth, is the second held in this Japanese capital since last year.

In his remarks, Dominguez said bilateral relations between the Philippines and Japan have emerged “closer and stronger” these past few years as the former rises to join the elite group of Asia’s tiger economies, fueled by its long-term goal to achieve zero poverty rates about two decades from now.

Japan is the Philippines’ major source of official development assistance (ODA) and regard it as a reliable ally in terms of infrastructure support from the period of reconstruction, one of its top trading partners, and its fourth largest source of foreign tourists, Dominguez said.