PHL plans retail dollar bond issue in 1st quarter

THE GOVERNMENT is planning to launch a US dollar retail Treasury bond issue in the first quarter of 2023, Finance Secretary Benjamin E. Diokno said on Wednesday.

“We’re launching first quarter of next year… We’re still finalizing the terms,” Mr. Diokno said during the Kapihan sa Manila Bay Forum, adding that the tenor would be at least five years.

He said the issue is expected to raise around $3 billion, depending on demand.

The planned transaction will be the second of its kind, following a $1.6-billion five and 10-year offering in 2021.

The onshore offer of an alternative investment product aimed at Filipinos overseas should boost funding for government programs to support the economy’s recovery.

The government traditionally offers retail Treasury bonds denominated in the local currency, with the most recent in September when it raised P420.45 billion ($7.43 billion).

The Philippines, one of Asia’s most active sovereign bond issuers, is planning to raise around $5 billion from offshore bonds next year, roughly the same as this year’s total, National Treasurer Rosalia V. de Leon told IFR, Refinitiv’s capital markets news service, this month.

Next year, the country will continue to favor US dollar bond sales, while also looking to return to the yen and euro markets, depending on market conditions. The Philippines is also looking at the possibility of issuing its maiden US dollar sukuk, said Ms. De Leon.

RISING REVENUES
Meanwhile, Mr. Diokno said the Development Budget Coordination Committee (DBCC) will be meeting on Dec. 5 to review the macroeconomic assumptions and fiscal targets.

“Our recovery has strong traction and our economic indicators suggest that despite the gloomy outlook globally, it’s looking very bright domestically,” he said.

The Finance chief also said the government will likely surpass its revenue collection target for the year. “Revenues are on the rise… We are very optimistic we’ll exceed our target. We expect revenue collection to surpass pre-pandemic levels,” he added.

Total revenue collections reached P2.9 trillion in the first 10 months of the year, up 18.3% year on year. This already accounted for 89% of the P3.3-trillion goal for the year.

“The BoC (Bureau of Customs) has met its annual target, the BIR (Bureau of Internal Revenue) is slightly behind, because the BIR was 6% below target, now its 3% below target,” he added.

MAHARLIKA FUND
Meanwhile, Mr. Diokno said lawmakers should make sure the proposed sovereign wealth fund will be independent and not influenced by politicians.

The House Committee on Banks on Tuesday approved “in principle” a bill creating the Maharlika Investments Fund (MIF).

“Just make sure it is not identified with the President. Whoever is the president, he cannot meddle with the use of the fund. You need a governing council that is totally out of the government, but still one member, the Finance secretary. The fund will be there forever and ever, it’s a legacy,” Mr. Diokno said.

“It’s not a fund that will be influenced by politicians. There should be a sense that it’s independent,” he added.

Sovereign wealth funds are typically supported by proceeds from commodity exports such as oil.

Under House Bill 6398, the P250-billion MIF will be funded by contributions from the Government Service Insurance System, the Social Security System, the Land Bank of the Philippines, and the Development Bank of the Philippines. — Reuters with Keisha B. Ta-asan and Luisa Maria Jacinta C. Jocson