THE CATASTROPHE-LINKED bonds (CAT) the government launched on Monday through the World Bank was met with strong interest from investors as it served as a diversifier to the pool of such securities in the market, top officials said.

“The successful float of the Philippines’ first ever ILS (insurance-linked security) or Cat bonds is one more proof of the strong investor support of the international business community for the Philippines amid the sweeping reforms being implemented by the Duterte administration to sustain the growth momentum while climate-proofing the country,” Finance Secretary Carlos G. Dominguez III was quoted in a statement released yesterday.

The Bureau of the Treasury (BTr) said aside from being the Philippines’ first CAT bonds, this issue was also the first CAT bonds to be listed in the Singapore Exchange and in any Asian exchange.

Last October, the government announced its plans to approach international financial markets to provide protection against earthquake and tropical cyclone risks. The BTr said that in partnership with the World Bank, the securities were planned to be coursed through the multilateral lender through the issuance of the ILS.

National Treasurer Rosalia V. de Leon said even though it took the government years to finalize the securities, it is high time for them to guard the fiscal health of the country against natural disasters given the country’s exposure to calamities.

“This instrument was years in the making, and we are grateful to the World Bank and our structuring agents for ensuring a successful deal. With our exposure to natural disasters, we cannot just sit idly by and do nothing,” Ms. De Leon was quoted as saying.

“We would also like to thank the Monetary Authority of Singapore (MAS) for their invaluable support of this endeavor and for the grant that they gave the Philippines to defray some of the expenses of this transaction,” she added.

The CAT bonds have two tranches, with a $75-million allotment for losses from earthquakes and $150 million for losses from tropical cyclones. Both tranches have a settlement date of Nov. 22 and maturity date of Dec. 2, 2022.

The bonds were under the International Bank for Reconstruction and Development’s capital-at-risk notes program designed to transfer risks related to natural disasters to capital markets.

To trigger payouts, an earthquake or a tropical cyclone will need to meet the criteria set under bond terms. — Beatrice M. Laforga