Gov’t launches $500-M bond for Pinoys abroad

The government on Thursday launched the sale of $500 million worth of retail Treasury bonds targeting Filipino workers overseas through an investors’ briefing. The fixed-rate multicurrency retail Treasury bonds will be auctioned off on April 20-27, said Roberto Juanchito Dispo, executive vice-president of First Metro Investment Corp. (FMIC), one of the issue managers. The other issue managers are BPI Capital Corp., Development Bank of the Philippines, PNB Capital & Investment Corp. and BDO Capital & Investment Corp. The issue size is $500 million, but the government may increase it to $1 billion depending on investor appetite. "I expect it to be successful because Filipino communities abroad and embassies said there is strong demand," National Treasurer Roberto Tan said. The three- and five-year multicurrency bonds will be denominated in $400 million and €75 million euros. At least a fifth will target retail investors and the rest will be sold to institutional investors. To be considered retail, the amount is anywhere between $100 and $100,000. Tan will leave this weekend, along with a team of government officials and representatives from the issue managers, for a series of seminars discussing the benefits of investing in these bonds. The seminars will be conducted at centers in countries in the Middle East, United States and in some parts of Asia, including Hong Kong. Filipino buyers abroad will be exempted from the 20-percent tax on interest income. Proceeds will be used to plug the budget shortfall, which is expected to hit P293 billion this year. Last year’s deficit was a record P298.5 billion. In January, the government raised $1.5 billion from the sale of global bonds and added $1.1 billion in February from the sale of yen bonds. — NPA, GMANews.TV