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Asia, Forex

Philippines raises $866.2 mln at retail dollar bond auction

* Govt launches maiden onshore retail dollar bond offer

* 5-year bonds priced at 1.375%; 10-yr debt at 2.25%

* Tenders at Wednesday’s auction reach $938.2 mln (Adds auction results, cbank chief’s comment)

By Enrico Dela Cruz

MANILA, Sept 15 (Reuters) – The Philippine government awarded $866.2 million worth of retail dollar bonds at a price-setting auction on Wednesday, launching an onshore offer of an alternative investment product to raise extra cash for its pandemic recovery.

The two-tranche offer drew tenders of $607.8 million for the five-year bonds and $330.4 million for the 10-year bonds at the auction, against an offer of $200 million for each tenor.

The treasury bureau awarded $551.8 million worth of bonds maturing in 2026, with the coupon rate at 1.375%, and $314.4 million worth of bonds due in 2031 with coupon rate of 2.25%.

The launch follows a series of recent promotional events aimed at Filipinos overseas, who remit home more than $2 billion in income every month.

Central bank governor Benjamin Diokno said the issuance of dollar bonds will help promote bond market activity and boost foreign exchange inflows.

“Rest assured that there will be no impact on the U.S. dollar-Philippine peso exchange rate if an investor withdraws from his foreign currency deposit account,” he said in a recorded message aired during launching ceremonies.

The dollar bond https://www.treasury.gov.ph/wp-content/uploads/2021/09/2021-Retail-ODB-Terms-and-Conditions.pdf will be available until Oct. 1 at a minimum denomination of $300 and multiples of $100 thereafter, making it more attractive for retail investors compared to the traditional offshore dollar bonds available at a minimum size of $200,000.

The government traditionally offers retail treasury bonds denominated in local currency, with the most recent in March, when it sold 463.3 billion pesos ($9.3 billion) of three-year bonds.

The Philippines, one of Asia’s most-active sovereign bond issuers, has also raised cash from offshore commercial debt markets.

It sold $3 billion of global bonds in June in addition to the more than $3 billion generated from other offshore bond offerings in prior months. ($1 = 49.8750 pesos) (Reporting by Enrico Dela Cruz Editing by Ed Davies, Martin Petty)


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