Phl issues new global bonds to fund deficit

The Bureau of the Treasury (BTr) announced a new round of Global Bonds, marking the Philippines’ return to the international capital markets through a triple-tranche global bond offering. The issuance includes 5.5-year, 10-year, and 25-year notes, aimed at helping finance the national budget amid a persistent fiscal deficit.

In a Tuesday press release, the BTr said initial price guidance was set at T+70 basis points for the 5.5-year tranche, T+100 basis points for the 10-year notes, and 5.90 percent for the 25-year bonds. Final pricing will be determined during the New York trading session later today, with settlement scheduled for 27 January 2026.

“We have seen favorable market conditions for the Republic to return to the international capital markets today. Anchored on stable fundamentals and our recent credit affirmation, this transaction reflects our proactive and strategic approach to secure cost-efficient funding while advancing the National Government's development priorities. We value the continued confidence and support of our investors,” said National Treasurer Sharon P. Almanza.

The Treasury said proceeds from the bond sale will be used for general budget financing. As of November 2025, the national government posted a P1.26-trillion budget deficit, which the BTr said represents 80.92 percent of the Marcos Jr. administration’s P1.56-trillion full-year target, “reflecting the government’s commitment to prudent fiscal management and consolidation.”

A national government budget deficit occurs when total expenditures exceed total revenues within a fiscal year, requiring the government to borrow funds or draw on reserves to cover the shortfall. Budget deficits are often used deliberately during economic slowdowns, natural disasters, or crises, when governments increase spending to stimulate growth, provide social protection, or finance infrastructure projects even as revenues lag.

The latest issuance follows several offshore fundraisings in recent years, including a $2.25-billion and €1-billion dual-currency offering in January 2025, a $2.5-billion triple-tranche issuance in August 2024, and a $2.5-billion dual-tranche sale in May 2024.

Finance Secretary Frederick Go said the transaction underscores the government’s commitment to sound fiscal policy and long-term development.

“The Marcos administration remains firmly committed to promoting strong and inclusive socioeconomic growth. This transaction underscores our steadfast dedication to sound fiscal policy and sustainable development. We are confident that our policy direction and reform agenda will continue to resonate with the global investment community and support a successful outcome for this offering,” Go said.

The BTr said the transaction is being managed by BofA Securities, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley, Standard Chartered Bank, and UBS as joint lead managers and bookrunners.

The Global Bonds are expected to carry credit ratings of BBB+ from S&P Global Ratings and Baa2 from Moody’s Investors Service.