PHL studying $500-M bond issue for OFWs in Saudi, US

THE government is looking to issue bonds to overseas Filipino workers (OFWs) in Saudi Arabia and the United States with a $500 million initial target, the National Treasurer said last week.

“I think there is a market, given the liquidity of the OFWs. So again like what the (Finance) Secretary is saying, it is to provide them a safer, more secure, and higher yielding instruments as well,” National Treasurer Rosalia V. De Leon told reporters late last week at the Finance department headquarters.

“The beneficiaries will be offshore… (with plans to raise) $500 million,” she said.

Asked for a timeline, Ms. De Leon said: “For this year, our external plans, we settled or completed the January issuance… This is something that we have to look into next year.”

Finance Secretary Carlos G. Dominguez III said that the government may offer the bonds in Saudi Arabia and the United States, where many overseas Filipino workers live.

“Obviously the ones where we have a lot of OFWs so that would be Saudi Arabia and the US, but again we have to get the total approval of the monetary authorities to sell bonds,” he said.

Ms. De Leon said that the investor appetite in those countries needs to be assessed before an offer is structured.

“We have to make sure what tenors they would like, what would be better shorter end of the curve or something much longer to serve their investment appetite,” she said.

The last such issue dates to 2010 during the Arroyo administration, offering dollar and euro-denominated retail treasury bonds with three and five-year tenors that raised $346 million. However, the offers were made locally.

Ms. De Leon said the bonds will be issued directly to the OFWs.

“In 2010, we did the multi currency bonds and they were issued onshore. So for the OFW bonds if ever, it would have to be done offshore. Meaning to say that it will have to be direct to the OFWs themselves,” she said.

Mr. Dominguez said that with the offshore scheme, the government has to secure approvals from the foreign regulators.

“We cannot go to Saudi Arabia and peddle the funds there without getting the approval of the government, and their monetary authority,” he said.

The idea came first from Budget Secretary Benjamin E. Diokno, who noted the possibilities of harnessing what he described as uninvested dollar inflows, to aid in funding the government’s P8.4 trillion medium-term infrastructure plan.

Moreover, Ms. De Leon said that the government will not rule out new external issuances this year, after raising the $500 million from the 25-year global bond offering in January this year, and a planned $ 200 million yuandenominated debt paper issue in the fourth quarter this year.

“If we see that there is an opportunity then we will enter the market,” she said. —