Philippines plans $500 million green bond offering
The Philippines is eyeing a $500 million green bond offer this year to fund its climate change mitigation projects, the Finance chief said.
“In the immediate future, we are looking at issuing half a billion US dollars in green bonds,” Finance Secretary Carlos G. Dominguez III told Bloomberg on Friday.
“We are waiting to see favorable market conditions for that.”
Mr. Dominguez in November said the Philippines is preparing to offer its first sovereign green bonds to fund climate change mitigation projects.
He had said that the Securities and Exchange Commission prepared the capital markets for green investments by releasing guidelines on green, social and sustainable bonds that follow regional standards.
For 2022, the Treasury bureau indicated that the National Government will borrow around 77% from domestic lenders, with the rest coming from external sources.
Foreign borrowings for 2022 will start with official development assistance, followed by commercial borrowings, the Department of Finance (DoF) said last year.
“The Philippines maintains its strong international presence by issuing global bonds in multiple hard currency markets such as US, Japan, and China,” Mr. Dominguez told Bloomberg , noting that the country continues to lean towards the domestic debt market.
The government recorded P11.73 trillion in outstanding debt as of end-2021, up 19.7% year on year. Foreign borrowings represented just over 30% of the total.
This meant the debt-to-GDP ratio is now at 60.5%, higher than the 54.6% a year earlier and slightly above the 60% threshold considered as manageable by multilateral lenders for developing economies.
“If you net out our internal government debt to government agencies, it’s only at 54% of GDP,” Mr. Dominguez said.
He expects debt-to-GDP to moderate by the end of 2022 or in 2023.
“We expect fairly high GDP growth rate and our tax collections are going to be much higher,” he said.
Tax collections, which he said was up 9% year on year in 2021, would be at pre-pandemic levels by the end of this year, he added. — Jenina P. Ibañez
