Philippines launches new US dollar global bond offering

The Philippine government has returned to the international capital markets with a triple-tranche US dollar-denominated global bond offering as it seeks to raise funds for budgetary requirements and development programs, according to the Bureau of the Treasury (BTr).

In a statement issued Tuesday afternoon, the Treasury said the offering consists of 5.5-year, 10-year, and 25-year tranches, with the longest tenor structured as a tap of the Republic’s existing 5.75-percent 2051 US dollar bonds issued in January.

The transaction marks the Philippines’ second international bond issuance of 2026, following its $2.75-billion triple-tranche offering in January.

The BTr said initial pricing guidance was set at 85 basis points above US Treasuries for the 5.5-year tranche, 125 basis points above Treasuries for the 10-year tranche, and 6.10 percent for the additional 2051 bonds. Pricing was scheduled during the New York trading session.

National Treasurer Sharon Almanza said the timing of the issuance reflects improving investor sentiment and favorable market conditions.

“The Republic’s return to the international capital markets comes at an opportune time, amid improving market sentiment and favorable global developments,” Almanza said.

“This transaction reflects our prudent and proactive approach to financing, allowing us to secure funding efficiently while supporting the National Government’s priority programs and development objectives.”

Moody’s Ratings has assigned a Baa2 senior unsecured rating to the planned bond offerings, including the tranches maturing in 2031 and 2036, reflecting the country’s investment-grade credit profile and strong access to funding markets.

The rating is in line with the Philippines’ existing Baa2 issuer rating and is supported by the country’s “high economic growth potential and fiscal metrics that are broadly in line with similarly rated peers,” Moody’s said in a statement on Tuesday.

The agency also cited the government’s “strong access to domestic and international funding markets and ample foreign-currency reserves to weather global capital flow volatility,” while cautioning that the conflict in the Middle East poses downside risks to the Philippine economy by driving up global energy prices and import costs.

“The conflict in the Middle East is raising downside risks to the Philippines' economic outlook by lifting global energy prices and external cost pressures,” the ratings agency said.

Finance Secretary Frederick Go said the peace agreement between the United States and Iran, which is scheduled to be signed in Switzerland on Saturday, could help lower the government's borrowing costs.

“If the ceasefire holds, then I think it will give us, as I said earlier, a lot of optionalities on what to borrow, how much to borrow, and where to borrow from,” Go told reporters on Tuesday.

“And of course, we are hopeful that the ceasefire will hold so that inflation goes down, interest rates go down, and the government can borrow at lower interest rates,” he added, noting that the government is considering another round of retail treasury bond offerings in the second half of the year, subject to market conditions.

The BTr said the proceeds will be used for general budget financing, with the transaction scheduled to settle on 24 June.