Manila – The Philippine government has successfully raised $1 billion from its first-ever sale of Sukuk bonds, also known as Islamic bonds.
According to Philippines News Agency, the sale saw robust demand, with orders peaking at 4.90 times the offered amount. The Sukuk bonds, featuring a 5.5-year tenor and a 5.045 percent interest rate, represent the Philippines’ debut in the global Islamic financial markets. The BTr stated that this issuance is a strategic move to promote Islamic banking and finance within the country.
The Sukuk issuance aims to diversify the Philippines’ global investor base by targeting Islamic-focused investors, particularly in the Middle East. This initiative follows the Investor Roundtable in Doha and the Philippine Economic Briefing in Dubai in September 2023, complemented by a successful roadshow in late November. The BTr highlighted that the transaction demonstrates the Republic’s ability to capitalize on stable market conditions to access international capital markets.
Department of Finance Secretary Benjamin Diokno commented on the success of the inaugural Sukuk issuance, emphasizing its affirmation of the Philippines’ standing in the international capital markets and the conviction of investors in the country’s financial inclusion agenda. He expressed hope that this transaction would spur momentum for Islamic banking and finance in the Philippines. The net proceeds from the Sukuk bond sale are set to complete the country’s external commercial funding for the year and will be utilized for general purposes, including budgetary support.