Philippines planning at least 30 billion pesos bond sale

THE Philippines plans to offer peso bonds for retail investors next month, according to people familiar with the matter, potentially raising the equivalent of billions of US dollars for state infrastructure and social projects.

Officials plan to hold a price-setting auction for an initial tranche worth at least 30 billion pesos (S$722 million) on Feb 7, according to the people, who asked not to be identified because they’re not authorised to speak about it.

The five-year debt will be offered to the general public later in the month, they said, which is expected to increase the amount raised.

Regular sales to retail investors are a big source of financing for the Philippine government, with funds used to plug a fiscal deficit and repay debts after a pandemic-driven spending spree. Officials raised 420.4 billion pesos in one sale last year, the first under President Ferdinand Marcos Jr.

Bonds for the general public are typically offered in small denominations of 5,000 pesos, making them accessible to a large base of savers seeking higher returns than bank deposits. In previous sales to retail investors, the treasury also offered 30 billion pesos initially and ended up raising multiples of that sum.

The auction next month would take place amid signs the Philippine central bank is probably approaching the end of its monetary tightening cycle, allowing investors to lock in higher returns.

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The sovereign is also offering holders of certain existing bonds the chance to exchange them for the new securities, the people said.

National Treasurer Rosalia de Leon said earlier this week that the government plans to sell both peso-denominated and US dollar-denominated retail bonds. She declined to comment when contacted by Bloomberg on Friday about the details of the peso-denominated retail bond sale.

The public offer period would run Feb 7 to Feb 17, with an issue date of Feb 22, according to the people. BLOOMBERG