Daiwa offers assistance in infrastructure financing

Japanese investment bank Daiwa Securities Group Inc. has offered to extend its assistance in the implementation of the Duterte administration’s massive infrastructure program, according to the Department of Finance (DOF).

Daiwa Securities chairman Takashi Hibino, who recently met with Finance Secretary Carlos Dominguez, said the bank could be of help in terms of financing the Philippine government’s massive infrastructure program, further boosting infrastructure investments in the second half of President Duterte’s term.

Dominguez, in turn, welcomed Daiwa’s offer, especially now that the Duterte administration is planning to scale up its infrastructure program amid global uncertainties triggered by the escalating US-China trade tensions and the monetary policy tightening in the US.

“It is more important for us now to continue stimulating the economy by doing the infrastructure program. That is our countercyclical approach,” Dominguez said.

“We will be tapping the international markets for bond financing so it’s a perfect fit and we hope your organization can continue supporting us,” he said.

During the meeting, Hibino also told Dominguez that Daiwa Securities was ready to support the Philippines’ next samurai bond or yen-denominated issuance.

He advised the government to issue bonds in the Japanese onshore market at least once a year, even in modest amounts, to reach more investors.

Dominguez then thanked Daiwa for its assistance which he said led to the country’s successful return to the Japanese debt market last August.

The finance chief said the Philippine government was looking forward to its partnership with Daiwa in future offshore transactions.

Other officials from Daiwa were also present during the meeting, including senior executive managing director and head of Global Investment Banking Yuichi Akai, senior adviser to the board Masaaki Amma, and associate director for the investment banking and debt capital markets Sushin Osada.

Last August, the Philippine government successfully sold ¥154.2 billion ($1.39 billion) worth of samurai bonds with maturities spanning three years, five years and 10 years. The DOF said this was the largest samurai bond transaction in Asia.

The securities were awarded at coupon rates of 0.38 percent, 0.54 percent and 0.99 percent, respectively. Overall, the transaction yielded a weighted average spread of 34.7 basis points above benchmark.