$400M eyed in retail onshore dollar bonds

THE Philippine government aims to raise at least $400 million (almost P20 billion) in its maiden sale of Retail Onshore Dollar Bonds to boost the state’s war chest for Covid-19 recovery and resilience programs.

In its notice of offering on Monday, the Bureau of the Treasury said they will be offering five-year and 10-year Retail Onshore Dollar Bonds in US Dollar Denomination with a target aggregate minimum amount of $400 million.

The minimum issue amount for each of the five-year and 10-year Retail Dollar Bonds is set at $200 million.

The pricing date for the two tenors is set for Wednesday, September 15.

The start of the public offer period will also be on the same day and it will end on October 1. The Treasury will issue the debt papers on October 8.

The Retail Onshore Dollar Bonds shall be sold during the public period in minimum denominations of $300 and multiples of $100 dollars thereafter. The Treasury earlier said the offering is seen to be far more accessible than the traditional US dollar-denominated global bonds issued by the Philippine government which require a minimum subscription of $200,000.

Those interested to invest in Retail Onshore Dollar Bonds may purchase through the Treasury’s online ordering facility, Bonds.ph mobile app and the Overseas Filipino Bank mobile application.

This year, the national government programmed to borrow a total of P3.1 trillion, most of which is set to be raised through domestic sources.

The government borrows to meet its spending requirements as well as to finance its budget deficit.

The economic team sees the national government’s budget deficit this year to reach P1.86 trillion or 9.3 percent of GDP, even higher than the P1.37 trillion or 7.6 percent of GDP in 2020. In 2019, the budget deficit stood at P660.2 billion or 3.4 percent of GDP.

The national government’s outstanding debt this year is also expected to balloon by the end of this year to P11.73 trillion, up by 19.8 percent from P9.795 trillion in 2020. This is also projected to further swell in 2022 to P13.42 trillion.

As of end-july this year, the national government’s outstanding debt has already piled up to a new record-high of P11.61 trillion, swelling by 26.7 percent from P9.16 trillion a year ago.