The government on Tuesday sold P15 billion worth of five-year debt paper despite the high interest rates demanded by investors.
Coupon rates for the newly-issued treasury bonds stood at 4.00 percent, up 75.4 basis points from the previous auction rate of 3.246 percent.
“The auction committee fully awarded the newly issued 5-year Treasury Bonds, in line with the market expectations, as benchmark rates track global adjustments,” the Treasury said in a statement after the auction.
Tenders for the government’s P25 billion bond offer were more than double at P35.6 billion.
The Philippines last week sold $2 billion from the sale of 25-year global bonds that fetched a record low interest rate.
The Bureau of Treasury said the 25-year dollar bonds were sold to yield 3.7 percent, similar to the coupon obtained by the debt instruments the government issued in 2016.
The coupon rate was also lower that the initial price guidance of 3.95 percent and still the lowest coupon ever issued by the Philippine government on a global bond since the 3.95-percent yield in 2015.
The transaction was the first ever offshore bond sale under the administration of President Rodrigo Duterte that aims to fund its ambitious infrastructure projects for the country.
The inter-agency Development Budget Coordination Committee earlier said the government wants to increase percentage of infrastructure to the economy at 6.8 percent in 2018.
The Philippines will use about $1.5 billion of the total $2 billion accepted tenders for liability management and the balance of $500 million in new money to finance the budget.
The tender offer exercise targeted existing bondholders to switch into the new global bonds. Bonds with a total notional value of $3.56 billion were submitted for the switch tender offer and the Philippines accepted a market value of $1.5 billion from the submissions.
“Amidst the volatility in global markets, we have managed to garner robust support from the fixed income investor community, a testament to the resilience of the Philippine economy as well as the strong faith that these investors have in the Duterte administration in executing and implementing reforms and strategies,” said National Treasurer Roberto Tan.
