Philippines raises 70.1 billion yen in first sustainability Samurai bond sale

Ralf Rivas
Philippines raises 70.1 billion yen in first sustainability Samurai bond sale

YEN. A Japanese yen note is seen in this illustration photo taken June 1, 2017.

Thomas White/Reuters

The Philippines raises funds in the Japanese market, even as the bond market faces volatility due to surging inflation and tightening of monetary policy worldwide

MANILA, Philippines – The Philippine government raised 70.1 billion yen (around $600 million or P28.98 billion) from the sale of its first sustainability Samurai bonds amid a volatile market environment hounded by pesky inflation and interest rate hikes globally.

The bonds, with an environmental, social, and governance or ESG label, have tenors of 5, 7, 10, and 20 years.

Bulk of the offer was on the shortest or 5-year tranche at 52 billion yen, while the 20-year notes amounted to 6 billion yen – the first long tenor Samurai offering of the Philippines.

The Department of Finance on Wednesday, April 13, said this is the first ASEAN or Association of Southeast Asian Nations sustainability bond transaction in the Samurai bond market, following the issuance of a 25-year sustainability bond last March in the United States dollar market.

“This is testament to the international appreciation of, and confidence in, the government’s strong commitment to climate change mitigation and adaptation initiatives and to deepening its domestic sustainable finance market,” said Finance Secretary Carlos Dominguez III.

The bond market is currently facing volatility amid central banks tightening monetary policy and Russia’s invasion of Ukraine heating up commodity prices. Meanwhile, the Philippine peso has remained weak, with yields further deteriorating.

National Treasurer Rosalia de Leon said the transaction demonstrated the country’s “ability to price tighter than current secondary levels and extend the maturity to the long-end of the curve.”

SMBC Nikko Securities and Mitsubishi UFJ Morgan Stanley Securities acted as lead managers for the deal. –

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.