In recent statements both the The Daiwa Securities Group and the Asian Development Bank have offered to help provide funding for the Duterte administration’s “Build, Build, Build” program. In particular, Daiwa securities stated its continued support for the Philippines’ future yen-denominated bond issuances in the Japanese market, the Department of Finance (DOF) said.
In a meeting with Finance Secretary Carlos Dominguez III, top executives of Daiwa Securities led by its chairman Takashi Hibino said the bank “could be of help in terms of financing” to further accelerate infrastructure investments in in the second half of President Duterte’s administration.
Hibino also told Dominguez that Daiwa “is ready” for the Philippines’ next Samurai bond float and advised that the government should issue such bonds at least once a year--even if just modest amounts--to reach more investors.
Dominguez, in turn, thanked Daiwa for its “invaluable” assistance that led to the Philippines’ successful return to the Japanese market last August with its Samurai bonds after an eight-year absence.
Also present at the meeting held recently in Bali, Indonesia were Daiwa officials Yuichi Akai, Senior Executive Managing Director, Head of Global Investment Banking; Masaaki Amma, Senior Advisor to the Board, Global Investment Banking Division; and Sushin Osada, Associate Director, Investment Banking/Debt Capital Markets, Daiwa Capital Markets Singapore.
The Philippines’ multi-tranche issue was the largest Samurai transaction in Asia at JPY 154.2 billion.
The 3-year tranche was priced 25 basis points (bps) above the benchmark, the 5-year at 35bps and the 10-year tranche at 60bps. It was the first time in almost 20 years that the government issued Samurai bonds on a stand-alone basis.
Dominguez told the Daiwa executives the Philippine government was looking forward to its partnership with Daiwa in future offshore transactions.
He said the Duterte administration would further scale up its infrastructure program to continue stimulating the economy amid global uncertainties triggered by the escalating US-China trade tensions and the Federal Reserve’s move to normalize monetary policy through successive interest rate increases.
Dominguez noted that the biggest high-impact infrastructure project that the Duterte administration is determined to implement--the Philippines’ first-ever subway--is being funded by Japan.
“It is more important for us now to continue stimulating the economy by doing the infra program. That is our countercyclical approach,” Dominguez told the Daiwa officials during the meeting. “We will be tapping the international markets for bond financing so it’s a perfect fit and we hope your organization can continue supporting us.”
Daiwa’s presence in the Philippines dates back to 1995, when it established a joint venture with the Development Bank of the Philippines (DBP)--the DBP-Daiwa Capital Markets Philippines--that now provides investment banking advisory services.
Manila-based lender Asian Development Bank (ADB) vowed to increase funding to the Philippines in support of the government’s infrastructure program.
In his speech during ceremonial exchange of documents at the Department of Finance (DOF) Monday, ADB President Takehiko Nakao said they will double the average loans from 2019-21 to around USD2.5 billion annually.
“The reason we are increasing our lending is because we want to support BBB (Build, Build, Build) project of this administration,” he said.
The Duterte administration targets to spend at least PHP8 trillion until 2022 to ensure that necessary infrastructure are constructed. (with a report from PNA)