The Marcos administration is eyeing to push through with its planned offering of retail dollar bonds (RDBs) by the first quarter of next year, the country’s finance chief said.
Benjamin Diokno, Department of Finance (DOF) secretary, said during the Kapihan sa Manila Bay forum yesterday the tenor of the planned issuance would be at least five years. The offering could be around $3 billion or more which, he said, would depend on demand.
“This (offering) is to make sure that our overseas Filipino workers (get to) save part of their income,” Diokno said.
Diokno earlier said the RDBs would push through before the year ends, but due to the busy holiday season, the government opted to launch it in the first quarter of 2023.
In October last year, the Philippine government raised $1.593 billion, or around P80.83 billion, through the country’s first-ever onshore RDB offering.
The said RDBs are the first onshore US dollar-denominated bonds to be issued by the Bureau of the Treasury in amounts of as low as $300.
Earlier this quarter, the Philippine government successfully returned to the international capital markets for the third time this year, its first under the Marcos administration, raising $2 billion from its US dollar-denominated bond offering.
In the same event, Diokno expressed support for the proposed measure that seeks to put up a sovereign wealth fund.
Diokno said the proposed Maharlika Wealth Fund is intended for future generations of Filipinos and will come up with the necessary safeguards.
“Just make sure that it is not identified with the president, such as that whoever is the president, he cannot meddle with the use of the fund. You really have to have a governing council that is totally out of government,” Diokno said.
“We want to create a fund that will take care of future generations of Filipinos. We really have to set aside for the future,” he added.
House Bill No. 6398 proposes to establish the said fund, which would draw resources primarily from contributions from the Government Service Insurance System (GSIS), Social Security System (SSS), Land Bank of the Philippines and Development Bank of the Philippines.
The proposed Maharlika Wealth Fund is patterned after the sovereign wealth fund of 49 countries.
“The problem with GSIS and SSS, their possible investments are restricted, most of the time (they can place it in) treasury bills, which has low returns. So to make the system more viable, they need to invest in resources,” Diokno said.
“For example, that fund can be used to fund some of the projects such as tollways. Toll roads can give a rate of return of, say, 20 percent, but if you invest in treasury bills, that’s only around five percent,” he added.
“It has safeguards, and it will be there forever,” Diokno also said.
