The Republic of the Philippines has successfully issued its Renminbi-denominated Bonds (Panda Bonds) of RMB2.5 billion with a tenor of three years on 15 May 2019. This is the second Panda Bonds issuance for the Philippines who issued its first Panda Bonds in March of 2018.

The bonds were priced at 3.58%, which allowed the Republic to achieve a tight spread of 32bps above the benchmark. The order book reached a total of more than RMB11 billion, reinforcing a strong vote of confidence in the Republic’s economic stewardship and transformative reform agenda.

In terms of geographical breakdown of investors, leveraging on the Bond Connect scheme, 42.4% of final allocation was placed to China’s onshore investors, and 57.6% went to overseas investors. Major investors include commercial banks from China’s onshore and offshore markets.

China Lianhe Credit Rating Co. Ltd. rated both the Philippines and this issuance as AAA, its highest rating. Aside from the local AAA rating, the Philippines has an international rating of Baa2/BBB+/BBB (Moody’s/S&P/Fitch).

Reacting to the favorable results of the Panda Bondsissuance, Finance Secretary Carlos Dominguez III said, “The success of the second ‘Panda’ bond float, which has come on the heels of the similarly well-received float of Euro-denominated offshore securities, illustrates the high level of confidence of the international markets in the Philippines amid the game-changing reforms initiated by President Duterte to sustain its upward growth trajectory and attract more investments.”

“Such confidence by the global investor community stems from our solid creditworthiness brought about by the government’s unwavering commitment to sound macroeconomic policies and fiscal discipline in the face of domestic and external challenges,” Dominguez added.

Expounding on the gains from the positive market perception, National Treasurer Rosalia de Leon said: “The success of our Panda bonds issuance, along with other recent issuances, resonates the positive market sentiment on Philippine credit. Through strategic and timely offerings, we are able to tap various markets even in a challenging environment that allowed for the Republic that resulted in more cost-efficient pricing.”

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