PH mulls sale of Samurai, Panda bonds next year
The government financial managers are now seriously considering the issuance of Samurai bonds next year while the government firms up the sale of Panda debt notes in China, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III said in an interview with reporters at the DOF headquarters that he already asked the Bureau of the Treasury to make a position on its planned sale of yen bonds “sometime” next year.
Dominguez also said the government wants to push through with the sale of the $200-million three- to five-year panda bonds “earlier than later in preparation for our expenditure program for next year.”
“I spoke to Leah [National Treasurer Rosalia de Leon] and we were reviewing what is our financing plan for the next few months and the next year. We were considering in what direction are the interest rates moving, are they steady going down or up?” Dominguez said.
“We also discussed the possibility of Samurai bonds, and I told her she should make a position on that. I suppose the direction I am thinking, but we have to confirm it, is we'll probably do a Samurai bond sometime next year,” he added.
The finance chief noted the Philippines needs to diversify its financing sources, adding the Asia's largest sovereign issuer has not done a Samurai bond in a long time.
“We have to get indication, the authority, and the appetite. We'll have to get indication on interest rates, what the exchange risks are going to be, so she’s making that study,” Dominguez said, referring to De Leon.
In January 2010, the Philippines sold its ¥100 billion ($1.1 billion) of Samurai bonds, its first yen bond sale in nine-years.
The government sold the 10-year Samurai bonds via private placement, with a partial guarantee from the state-backed Japan Bank for International Cooperation for up to 95 percent of the bonds under its Japanese Market Access Support Facility.
Samurai bonds are yen bonds issued in Japan by non-Japanese entities.
Last month, the DOF embarked on a non-deal roadshow in Shanghai, China to promote the upcoming issuance of panda bonds by the Philippine government.
Dominguez had said they plan to issue $200 million in three- to five-year panda bonds by October or November.
Panda bonds are yuan-denominated debt paper issued in China by foreign governments or companies.
The Monetary Board, the Bangko Sentral ng Pilipinas’ highest policymaking body, already approved in principle the planned panda bonds issuance, while the Philippine government was in the process of also securing approvals from the People’s Bank of China (PBOC).
In general, “our plan of borrowing 80 percent from the domestic market and 20 percent in foreign currencies remains unchanged. We will therefore, remain active in the foreign markets,” according to Dominguez.