Gov’t raises $2.75B from int’l bond foray
The Philippine government has raised $2.75 billion from its latest multitranche sale of US dollar bonds, underpinned by investment-grade ratings from major credit watchdogs.
A term sheet showed that the Marcos administration sold bonds across three tranches, with $500 million maturing in 2031, $1.5 billion in 2036, and $750 million in 2051.
The issuance marks the government’s return to the international debt market after its January 2025 offshore deal, as it seeks to provide additional budgetary support and repay a portion of borrowings.
According to industry sources, the sale was met with “very strong demand,” including from sovereign wealth funds and US investors.
The sale comes amid a volatile global market, with escalating tensions between the US and Europe after US President Donald Trump threatened another trade conflict as part of his push to take control of Greenland.
Even so, the bond offering obtained investment-grade ratings of “Baa2” from Moody’s, “BBB” from Fitch, and “BBB+” from S&P Global Ratings.
These ratings indicate that the sovereign issuer carries moderate credit risk and is capable of meeting financial commitments despite prevailing market conditions.
Moody’s attributed its credit rating to the country’s high economic growth potential, even as gross domestic product (GDP) for 2025 is expected to come in below the government’s 5.5- to 6.5-percent target range.
“The government has strong access to domestic and international funding markets, a stable banking system and ample foreign currency reserves to weather global capital flows volatility,” said Moody’s, which projected a 5-percent full-year growth.
“These credit strengths are balanced against its low per capita income, some constraints on the quality of institutions, which stand in contrast with high policy effectiveness, and the sovereign’s high exposure to physical climate risks,” it added.
Meanwhile, Fitch said a positive or upgraded rating action would hinge on the country’s ability to maintain debt-to-GDP and debt-to-revenue ratios, and sustain fiscal consolidation and growth.
“Sustained reductions in government debt/GDP and debt/revenue ratios to levels due to reforms to broaden the revenue base or gains in spending efficiency that do not undermine the growth outlook,” said Fitch, as it outlined rating sensitivities.
Stronger medium-term growth than currently forecast and continued adherence to sound macroeconomic policies could support faster convergence of GDP per capita toward peer levels, it added.
The credit rater earlier maintained its growth projection at 5.6 percent for 2025.
Fitch added that failure to sustain the country’s foreign-currency reserves and net external debt position, including any significant rollback of consolidation efforts to support growth, could weigh on the public finance metrics.
“Reduced confidence in strong, stable medium-term economic growth and continued adherence to sound economic policies, [could lead] to the withdrawal of the +1 notch adjustment on macroeconomics,” it added.
