(Bloomberg) -- The Philippines plans to sell $3.5 billion in overseas debt this year, lower than last year, as heightened global uncertainties may prompt the government to borrow more domestically as rate cuts continue, according to its finance chief.
Most Read from Bloomberg
-
How Sanctuary Cities Are Preparing for Another Showdown With Trump
-
NYC Commuters Get New Way to Dodge Traffic: $95 Helicopter Rides
-
Deadly Landslide of Garbage Displays Uganda's Missed Opportunity
-
Scaramucci, Ackman Donate to Whitney Tilson’s NYC Mayoral Run
Most of the planned global bond offer will be in US dollars, and the sale could start in the first half, Finance Secretary Ralph Recto told Bloomberg Television’s Haslinda Amin on Monday on the sidelines of the World Economic Forum in Davos.
The government is in talks with eight banks to help with debt sale, Recto said. About $1.5 billion in dollar bonds will be due in March and 785 million euros in euro-denominated debt in April, according to data compiled by Bloomberg. Last year, the Philippines sold about $4.5 billion in global bonds.
“There’s a lot of domestic savings in the Philippines so there’s a lot of liquidity,” Recto said. The Philippines is expected to grow at least 6% this year, said the finance secretary who expects the country to remain resilient in the face of tariff and immigration policies that incoming US President Donald Trump may implement.
Inflation and interest rates are where the Philippines may feel the impact of Trump’s policies, especially if he imposes steep tariffs that may drive prices higher, according to Recto.
The Philippines will continue to deliver interest rate cuts in 2025 but the extent and timing will depend “on tariffs and inflation,” he said. Monetary easing may be staggered as far apart as 25 basis points per semester, said the finance chief.
Borrowing costs in the Philippines have remained elevated even after a total of 75 basis points in rate cuts from August to December last year. The finance chief said ample remittances from overseas workers and other dollar sources ease the pressure to raise foreign funding.
Robust household consumption will continue to drive growth, while geopolitical tensions pose the biggest risk, Recto said.
The finance chief also said that the current peso level is “okay” as it’s moving in line with other currencies that have also weakened due to a strong dollar. Authorities intervene in the currency market only when it’s volatile, he added.
The Philippine currency has weakened by about 1% against the dollar so far this year, among the worst performers in the region.