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  • By Ernie Tolentino

Diokno: Gov't Eyes Retail Dollar Bonds

Encouraged by its successful US-dollar global bond sale, the Marcos administration is contemplating offering retail dollar bonds (RDBs), possibly before the year-end.


Photo Insert: Diokno said if it pushes through, the RDBs may be the last dollar-denominated issuance for 2022.



“We’re planning to issue retail dollars. Maybe before the end of the year or until early next (year), this is for the OFWs (overseas Filipino workers), they can maybe buy (at least) $100 using e-wallet,” Benjamin Diokno, Department of Finance secretary, said during the recent central bank’s Annual Reception for the Banking Community.


Diokno said if it pushes through, the RDBs may be the last dollar-denominated issuance for 2022.



In October last year, 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 Bureau of the Treasury in amounts of as low as $300.


Just the other week, the Philippine government successfully returned to the international capital markets for the third time this year, its first under the Marcos administration, as it raised $2 billion from its US dollar-denominated bond offering.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

The triple-tenor transaction follows the Philippines’ 70.1 billion yen four-tranche Samurai bond offering in April 2022 and $2.25 billion three-tranche bond offering in March 2022.

Meanwhile, Diokno said he does not see the peso-dollar exchange rate reaching P65 to a US dollar.


“No, it will not reach P65. That’s my prediction. There are those who are saying (it will reach) P68, don’t believe them. Otherwise, you’ll get burned,” Diokno said. He stated as well that the country’s inflation rate for the year will still be within the range.


Business: Business men in suite and tie in a work meeting in the office located in the financial district.

“Our average inflation target for this year is 4.5-to-5.5 percent. It will still be there. And we expect inflation to go back to midpoint by 2024,” Diokno said.


“We are expecting inflation to start tapering off by the last quarter of this year, or at the very least first quarter of next year. We have to look at our situation in comparison with other countries. We’re in the midpoint, even in the depreciation of the currency, we’re in the midpoint. There are many countries which have worse depreciation,” he added.


Banking & finance: Business man in suit and tie working on his laptop and holding his mobile phone in the office located in the financial district.

Meanwhile, data of the Bureau of the Treasury (BTr) showed the national government’s total debt payments in the first eight months of the year amounted to P682.85 billion. According to the latest cash operations report, the national government’s debt payments in January to August was 24.91 percent lower than the P909.33 billion paid out in the same period a year ago.


Amortization declined by 44.52 percent to P342.77 billion from the P617.83 billion paid out in the same period the previous year. Of the total principal payments made during the period, P279.61 billion was used to pay local lenders while P63.15 billion was spent to settle foreign obligations.


Market & economy: Market economist in suit and tie reading reports and analysing charts in the office located in the financial district.

Interest payments as of August totaled P340.08 billion, up 16.67 percent from the P291.49 billion paid out as of the same period the previous year.

Of this amount, P258.5 billion was paid to domestic creditors while P81.58 billion was for international debt.


In August alone, debt payments amounted to P68.3 billion, 9.04 percent down from the year-ago level of P75.09 billion. Amortization amounted to P37.52 billion while interest payments totaled to P30.77 billion. The BTr said interest payments in August rose by 28.59 percent from last year’s figure due to the low base effect of the advanced payment of global bonds in 2021.



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