Marcos admin borrows $2 billion from foreign lenders thru bonds to fund budget

ABS-CBN News

Posted at Oct 06 2022 01:36 PM | Updated as of Oct 06 2022 06:07 PM

MANILA - The Philippines has borrowed $2 billion from foreign lenders via a bond offering to fund its budget, the Bureau of Treasury said on Thursday. 

The dollar bond issuance, which was the first under the administration of President Ferdinand Marcos Jr, follows the 70 billion yen bond offer in April and the $2.25 billion offering in March, Treasury said.

National Treasurer Rosalia de Leon said the successful $2 billion bond issue was in 3 tranches. 

  •  $500 million 5 years at 5.17 percent
  •  $750 million at 10.5 years at 5.609 percent
  •  $750 million at 25 years ESG at 6.10 percent 

Treasury said the proceeds from the sale of the 5-year and 10.5-year bonds will be used for “general purposes, including budgetary support”. 

“The proceeds from the 25-year Global Bonds will be applied to finance or refinance assets under the Republic’s Sustainable Finance Framework,” it added. 

The agency noted that the bonds attracted interest from a diverse pool of international investors, which indicated a strong global investor appetite for the Philippines.

“Despite the ongoing weakness in global credit markets amid high inflation and rising US interest rates, the Republic was able to navigate volatile market conditions and successfully price the Global Bonds,” Treasury said.

Finance Secretary Benjamin Diokno said the successful bond offering “demonstrates investor confidence in the new government” led by Marcos. 

The fresh borrowings come as the Philippines’ sovereign debt hit P13.02 trillion at the end of August. 

Moody's Investors Service said it has assigned an investment grade Baa2 rating to the Philippines' new dollar-denominated bond offerings.

"The rating mirrors the Government of the Philippines' issuer rating of Baa2," Moody's said.

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