Philippines looks to raise $1.5B via triple-tranche dollar bonds

By Aaron Michael C. Sy, Reporter

THE GOVERNMENT is seeking to raise at least $1.5 billion from its triple-tranche offering of dollar-denominated notes, marking the Marcos administration’s fourth offshore bond issuance and its first in a year.

National Treasurer Sharon P. Almanza said in a Viber message that the government is targeting benchmark volumes of at least $500 million for the 5.5-year, 10-year, and 25-year issuances.

“This transaction marks the Republic’s return to the international capital markets for 2026, building on a robust track record of successful issuances, following a dual-currency issuance of $2.25 billion and €1 billion in January 2025, a $2.5-billion triple-tranche offering in August 2024, and a $2-billion dual-tranche offering in May 2024,” the Bureau of the Treasury said in a statement on Tuesday.

Proceeds of the issuance will be used for general budget financing, it added.

The government aims to price the 5.5-year tranche at about 70 basis points (bps) over the US Treasuries, the 10-year tranche at around 100 bps over US Treasuries, and the 25-year tranche at near 5.9% levels.

The transaction was scheduled to be priced during the New York session on Tuesday, with the settlement date set on Jan. 27.

“The Marcos administration remains firmly committed to promoting strong and inclusive socioeconomic growth. This transaction underscores our steadfast dedication to sound fiscal policy and sustainable development. We are confident that our policy direction and reform agenda will continue to resonate with the global investment community and support a successful outcome for this offering,” Finance Secretary Frederick D. Go said in a statement.

BofA Securities, Deutsche Bank, HSBC (B&D), JPMorgan, Morgan Stanley, Standard Chartered Bank and UBS were mandated as joint lead managers and bookrunners for the transaction.

The global bonds, which will be drawn from the government’s existing shelf program, were rated “Baa2” by Moody’s Ratings, “BBB+” by S&P Global Ratings, and “BBB” by Fitch Ratings. These ratings are in line with the Philippine government’s issuer rating.

“We have seen favorable market conditions for the Republic to return to the international capital markets today. Anchored on stable fundamentals and our recent credit affirmation, this transaction reflects our proactive and strategic approach to secure cost-efficient funding while advancing the National Government’s development priorities,” Ms. Almanza said.

Meanwhile, a trader said in a text message that the issuance could be affected by the sell-off in Japanese bonds and US Treasury yield movements on Tuesday, which could result in investors asking for higher yields but still lower than the initial price guidance.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera likewise said in a Viber message that the demand for the dollar bonds could be “healthy but selective” amid a weak peso and volatile US market.

The local unit on Tuesday closed at P59.455 versus the greenback, weakening by 1.5 centavos from its P59.44 finish on Monday, data from the Bankers Association of the Philippines  showed.

The peso’s intraday low of P59.50 was its weakest on record, surpassing the previous record low of P59.46 set on Jan. 15 as well as the P59.47 it briefly touched.

“A softer peso often pushes some investors toward higher-yield emerging-market papers like Philippine-issued USD bonds, especially if yields are attractive relative to US Treasuries and regional peers,” Mr. Rivera said. “But, global risk sentiment and interest rate uncertainty mean that investors will be discerning on timing, tenor, and pricing.”

Mr. Rivera added that the government will have to price the global bonds higher if the dollar rallies or risk appetite wanes to secure demand, but a more stable US market could tighten spreads.

“On rates, expect the government to pay a premium relative to recent periods of calm both to compensate for forex (foreign exchange) risk and global volatility,” Mr. Rivera said.