The government is set to launch its planned retail dollar bonds (RDB) this month, the Department of Finance (DOF) said.
“We will launch the RDB 2 next week, on September 26 to be specific,” finance secretary Benjamin Diokno said in a press briefing late Friday.
“I think initially (we’re looking at a volume of) $1 billion, but it seems like there is strong demand, so it can be upsized,” he added.
The government is eyeing a tenor of either five or 10 years.
In October 2021, 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 BTr in amounts of as low as $300.
For the upcoming transaction, the government opted to lower the minimum denomination to $200.
Financial literacy sessions were recently held with overseas Filipinos in Doha and Dubai to promote the RDBs 2. Similar sessions were also conducted for over 700 Filipinos across Europe, Japan, the United States and Canada.
The Bureau of the Treasury is also targeting to issue the Republic’s maiden Sukuk bonds within the fourth quarter of 2023.
“Another objective of the Middle East roadshow is to promote Sukuk bonds. These are Islamic issuances that will diversify the government’s sources of financing, widen our investor base and boost investments in physical and digital connectivity,” Diokno said.
“The working visit served as a good opportunity for us to make new inroads into the previously untapped Middle East market. We were pleasantly surprised to know that both public and private sector players in Qatar and UAE have been eager for a long time to forge stronger economic ties with the Philippines,” he added.
Meanwhile, Diokno was asked if, historically, 100 percent of investment pledges actually materialize.
In a recent statement, the DOF highlighted the trillions worth of investment pledges received by the administration following the various overseas economic briefings, investor roadshows and international dialogues.
“Historically, not necessarily. They have to come here and visit. But you cannot base it on history-it depends on the atmosphere because if it’s better in the competitor country, they will go there instead,” Diokno said.
“They recognize that Southeast Asia is the growth center, it will be the source of growth in the next 25 years, so they gravitate (towards the sub-region), they’re choosing among Asean countries, also India. So you have to compete with these,” he added.
Trade secretary Alfredo Pascual also said earlier this month that the investment leads of $71 billion in 130 projects generated by the government the past year would materialize in five years.
“We cannot expect it to happen overnight. During our conversations in the Middle East, they want specific projects. They want to know the specific person they can deal with. The due diligence becomes more extensive. We don’t expect that to happen overnight,” Diokno said.
Diokno mentioned that there are two complaints cited by potential investors in the Philippines: the ease of doing business and the cost of power.
“The ease of doing business, it’s mostly because of the local government units, the process of getting permits (is difficult). The other complaint, of course, is the cost of power. Because it turned out, in other countries, power is heavily subsidized,” Diokno said.
The various investment pledges recently showcased by the DOF include P800 billion from Singapore and Indonesia; P229 billion in investment pledges from the United States of America; P157 billion in approved foreign investments from Germany; P293.1 million approved investments from the United Kingdom; and P3.8 billion approved foreign investments, $600 million infrastructure investment pledges and P708.2 billion investment deals from Japan.
