THE GOVERNMENT will soon proceed with its planned sale of yen-denominated bonds as it seeks to avail of favorable rates amid strong demand before the Aug. 11-Sept. 9 鈥済host month鈥 is well under way, a senior official who asked not to be identified told reporters on Tuesday.
Finance Secretary Carlos G. Dominguez III said separately during 2019 budget deliberations at the Senate on Tuesday that 鈥渟amurai鈥 bonds will be priced soon.
鈥淲e are going to determine within the next week or so what the interest rates will be,鈥 Mr. Dominguez told members of the Senate Committee on Finance on Tuesday.
The Finance chief was asked about the government鈥檚 planned offshore borrowings, which he said carried interest rates much lower than what is offered by commercial lenders.
Yen-denominated papers were last sold in 2010, when the government raised 楼100 billion worth of 10-year papers, fetching a 2.32% coupon.
Finance officials expect strong appetite for this year鈥檚 offering of samurai bonds as they expect demand to reach $1 billion.
The debt notes will come in three, five and 10-year tenors, according to a Bloomberg report.
The planned offering is expected to come before the so-called 鈥済host month,鈥 a Chinese tradition that spooks investors from making big bets.
The Bank of Japan also stood pat on policy settings last month, and noted that it will keep its low rate regime 鈥渇or an extended period of time,鈥 defying a global trend of rate tightening.
Economic managers of the Duterte administration staged a Philippine economic briefing in Tokyo last June.
National Treasurer Rosalia V. De Leon said they talked to 16 Japanese investors — mostly asset managers there — just as authorities were doing paperwork and conducting due diligence for the planned sale.
In May, Ms. De Leon said the Bureau of the Treasury had tapped five Japanese banks to serve as bookrunners and agents: Mizuho Bank Ltd., The Daiwa Bank Ltd., Nomura, Sumitomo Mitsui Banking Corp. and the Mitsubishi UFJ Group.
Bank executives have expressed interest in taking part in the Philippines鈥 return to the yen debt market, saying they expect strong demand as Japanese investors are looking for places to invest.
The national government borrows from local and foreign sources to fund the increased spending and boost economic activity. The state plans to borrow a total of P888.23 billion this year to plug its budget deficit that is capped at three percent of gross domestic product.
The Treasury raised $2 billion through a global bond sale in January, with half consisting of new money and the other $1 billion raised to pay existing debts. The government also issued $230 million worth of renminbi-denominated 鈥減anda鈥 paper bonds in March. — Melissa Luz T. Lopez
