Global bond market opportunities still open for PHL
THE PHILIPPINES can still tap the global bond market for a third time this year despite ongoing market volatility, Citigroup, Inc. (Citi) said.
“(The) answer is a simple yes,” Paul Raymond A. Favila, Citi chief executive officer and banking head for the Philippines, said on Tuesday when asked if the Philippines still has an opportunity to tap the global bond market.
“It’s a question of aligning our clients’ priorities with the opportunity out there,” he added.
According to Mr. Favila, the government would have to ensure that its next move will be timed strategically to align with its existing strategies.
“So, timing is also very key,” he said. “But with any discussion around capital, it needs to be strategic, and it needs to blend in with the existing strategy. So, long and short is yes, there is opportunity, but it’s a question of whether it is the right strategy for that particular client or otherwise.”
Mr. Favila added that recent global developments will likely determine the pricing of the bonds.
“Of course, it comes at a particular price, which is determined pretty much by what’s happening to the rest of the world,” he said.
Last month, the National Government tapped the global bond market for the second time this year, raising $2.5 billion from a triple-tranche dollar bond offering.
Broken down, it sold $550 million in 5.5-year bonds, $1.65 billion in 10-year bonds, and also borrowed an additional $300 million by tapping its existing global bonds due in 2051.
The Treasury bureau said this transaction completes the government’s external commercial borrowing program for this year.
In January, it returned to the offshore debt market after a year, issuing its largest US dollar-denominated bonds in over three years worth $2.75 billion. Under this triple-tranche offering, the government raised $500 million from 5.5-year bonds, $1.5 billion from 10-year papers, and $750 million from 25-year bonds.
Meanwhile, Manish Bajaj, head of Corporate Banking at Citi Philippines, said recent economic woes have encouraged the bank’s clients to diversify their investments outside of the Philippines.
“One is, of course, we are seeing a lot more clients looking to focus on diversification, thereby driving growth,” Mr. Bajaj said. “So, they are looking outside (the) Philippines, both within the Asia-Pacific (or) ASEAN (Association of Southeast Asian Nations) region and outside, globally, as well.”
The Philippine economy has been in a slump since late last year, weakening to a new post-pandemic low growth of 2.8% in the first quarter amid the lingering effects of the flood control corruption mess and the onset of the Middle East war-driven energy crisis.
Economic managers have said that the economy will likely remain weak this year, with the Development Budget Coordination Committee slashing its growth target to 3.5%-4.5% for this year from 5%-6% previously. — Katherine K. Chan
