Gov’t charting return to foreign debt marts

THE GOVERNMENT is now charting the country’s return to the dollar, euro, yuan and yen debt markets, the Finance chief said on Friday last week.

“We… told the other bankers that our policy now is not to be absent from any major market for long periods,” Finance Secretary Carlos G. Dominguez said at the Finance department’s headquarters in Manila, recalling discussions on the sidelines of economic managers’ briefing in London last month.

“We are going to explore doing something in England, and now we are getting an invitation from some of the ambassadors from Europe to have a road show again,” said Mr. Dominguez when asked about a possible bond offer there.

“I don’t know if we can finish the euro [bond sale] this year, but certainly next year,” he added when asked for a time table.

The government last borrowed euros in 2010, raising €75 million in three- and five-year multi-currency retail Treasury bonds that also raised $400 million. It also raised €500 million in 10-year debt in 2006 in a multi-currency global bond offer along with $1.5 billion.

“The euro debt market, in fact I also told [National Treasurer Rosalia] Lea [V. de Leon] maybe we should make a private presentation to the wealth fund of Norway. That’s the biggest in the world,” said Mr. Dominguez.

He noted that the timing and the size of the offer would depend on prevailing market conditions, saying: “At this point in time, we will feel the market first.”

Moreover, he said that the government’s dollar-denominated bonds usually offered late in

January will likely be sold ahead of schedule due to external uncertainties caused by the Federal Reserve’s continued monetary policy tightening and the US’ trade war with China.

“I asked Lea [Ms. De Leon] to please bring the schedule forward rather than wait for next year because of all the announcements and the uncertainties that are, I think, going to start hitting more, impacting the market more, better make the issuance program earlier rather than keep it at the end of January,” he explained.

He said that the size will be “about a billion or two billion (US dollars) more or less.”

Mr. Dominguez also said that they will return to the renminbi and yen debt marts.

“‘Yung samurai we are going to come back within 12-18 months from August. In China, we will come back to the market again within 12-18 months from last March,” he said.

This year, the government raised $2 billion in 10-year securities with $750 million in new money and swapping the balance in a liability management exercise — the second dollar bond offer of the Duterte administration.

It also raised $230 million in its maiden renminbi-denominated “panda” bond float in March consisting of three-year notes; and $1.39 billion worth of three-, five-, and 10-year papers in August in its return to the “Samurai” bond market after eight years.

The government has programmed a 75-25 ratio in its borrowing plan for 2019-2022, favoring local lenders.