Careful timing needed for RTB, defense bonds By Reine Juvierre S. Alberto
W
HILE the issuance of government-guaranteed Retail Treasury Bonds (RTBs) and “defense bonds” will gain support, careful timing must be considered so as not to choke the debt market, according to an investment banker. Following the Bureau of the Treasury’s (BTr) recent Fixed-Rate Treasury Note (FXTN) offering, BDO Capital and Investment Corp. President Eduardo Francisco told reporters that
WORLD » A6
TRUMP’S TRADE WAR SPARKS GLOBAL REALIGNMENT: ALLIES TURN TO CHINA
ROTARY CLUB OF MANILA JOURNALISM AWARDS
2006 National Newspaper of the Year 2011 National Newspaper of the Year 2013 Business Newspaper of the Year 2017 Business Newspaper of the Year 2019 Business Newspaper of the Year 2021 Pro Patria Award PHILIPPINE STATISTICS AUTHORITY 2018 Data Champion
the government could still float both RTBs and defense bonds this year to fulfill its financing needs. Francisco said the bonds could be both benchmark-sized, with each issuance absorbing at least P300 billion from the debt market. However, the investment banker cautioned that the debt papers must not be issued simultaneously, which would choke the market. “Let’s not do it at the same time with the RTBs, because we’ll run out of money. There should be timing. Those
are the things we’re coordinating,” Francisco said. BDO Capital is usually tapped by the Treasury to serve as the Joint Issue Manager for the government’s bond issuances. As such, the bonds’ issuance could be timed during the seasonal flow of remittances into the country. The RTBs could be issued in the next four months, or in August, when remittances flow into the country at the start of the school year to pay for students’ tuition fees, Francisco said. RTBs allow ordinary Filipinos to in-
vest at least P5,000, while helping the government raise funds to finance its priority projects.
Defense bonds
MEANWHILE, the government could probably float its defense bonds in December, allowing investors to set aside a portion of their Christmas money, Francisco added. As for the tenor, Francisco said the DND “wants it as long as possible” because there is not much cash flow See “Careful,” A2
BusinessMirror
www.businessmirror.com.ph
A broader look at today’s business Tuesday, April 29, 2025 Vol. 20 No. 198
EJAP JOURNALISM AWARDS
BUSINESS NEWS SOURCE OF THE YEAR
(2017, 2018, 2019, 2020, 2021) DEPARTMENT OF SCIENCE AND TECHNOLOGY
2018 BANTOG MEDIA AWARDS
TRADE-TIED ‘BIG DRY-UP’ OF FDI DRAGS DOWN PHL T
n
P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK
Infraspend accelerates to ₧182.9B in Jan-Feb
By Cai U. Ordinario @caiordinario
HE Philippines is part of the “big dry-up” of Foreign Direct Investments (FDIs) which was brought by the slowdown of global trade to GDP, according to ANZ Research. In its latest economic brief, ANZ Research said the collective net FDI into India, Indonesia, Malaysia, the Philippines, South Korea, Taiwan, Thailand, and Vietnam dropped to -0.1 percent of GDP in 2024, the weakest since 2012. The Bangko Sentral ng Pilipinas (BSP) recently reported that investments made by foreign investors amounted to $731 million in January 2025, lower by 20 percent from the $914 million recorded in January 2024. (See: https://businessmirror. com.ph/2025/04/12/investorjitters-push-down-fdi-net-inflows-in-january/). “This decline is due to a broader downtrend in the region’s inward FDI cycle, which has been brewing for a while and is not due to geopolitical factors alone,” ANZ Research said. “We believe the stagnation in global trade-to-GDP is at the heart of the FDI slowdown.” ANZ Research said for the “net contributor” economies such as Thailand, South Korea and Taiwan, net FDI was -1.6 percent of GDP in 2024, 30 basis points below the long-term average. The “net recipient” economies—
T
HE national government’s infrastructure spending accelerated to P182.9 billion as of the end of February, driven by project completions, faster payments and direct funding for transport and flood control projects. Latest data from the DBM showed infrastructure disbursements amounted to P182.9 billion from January to February 2025. This is higher by 19.3 percent from the P153.4 billion spent during the same period in 2024. Infrastructure disbursements include infrastructure components of subsidy and equity to staterun corporations and transfers to local government units. Infrastructure and capital outlays also expanded by 23.1 percent year-on-year to P148.3 billion from P120.5 billion. The strong spending was due to the Department of Public Works and Highways’ (DPWH) completion of carryover projects, payments for emergency and disaster-related civil works, settlement of Right-of-Way issues, increased contractor billings and expedited processing of accounts. Additionally, direct payments by development partners for processing billings of ongoing foreign-assisted projects, such as the North-South Commuter Extension Project, South Commuter Railway Project, Davao Public Transport Modernization Project and Pasig-Marikina River Channel Improvement Project, helped sustain the robust infrastructure and capital expenditure performance.
India, Vietnam, Indonesia, the Philippines and Malaysia—saw total net FDI drop to 0.7 percent of GDP in 2024 versus the longterm average of 1.5 percent. In order to prevent further FDI decline, ANZ Research said Asian economies must create ecosystems that help attract FDI. Policies that support research, intellectual property, labor upskilling, and export infrastructure are needed. It also said that while the production of “new age” goods is expected to continue, traditional low- and medium-tech goods are not expected to see a production surge. “According to our model, the variables that influence net FDI flows significantly included product specialization, global export share and the share of services exports in GDP,” the think tank said. Earlier, state-owned think tank, Philippine Institute for Development Studies (PIDS), said the country must improve its logistics and customs efficiency, strengthen its export base, and upskill its workforce if it wants to See “Trade,” A12
WEAKER U.S. TARIFFS IMPACT KEEPS PESO STRONG–S.M.B.C.
T
HE weaker impact of United States tariffs on the Philippines is keeping the peso strong, according to Singapore-based Sumitomo Mitsui Banking Corporation (SMBC). In its latest brief, SMBC said the performance of Asian currencies have been mixed but there are currencies such as the Philippine peso and the Malaysian Ringgit that have appreciated. “MYR and PHP were up. Foreign inflow to stock markets supported MYR. PHP remained strong as the impact of tariffs
on the Philippines’ economy and markets is expected to be smaller than its Asian peers,” SMBC said. On Monday, data from the Bankers Association of the Philippines (BAP) showed the peso closed at P56.42 to the US dollar, slightly weaker than Friday. Monday’s close was the weakest since last Thursday when the peso closed at P56.555 to the US dollar. Last Friday, the Philippine peso closed at P56.265 to the US dollar, the strongest level of the peso since October 2024 when See “Weaker,” A2
Overall govt spending
FILIPINO COMMUNITY MOURNS AFTER VANCOUVER TRAGEDY Hundreds attended vigils across the city for the victims of the tragic
Lapu Lapu Day festival incident in Vancouver, where a driver killed 11 people and injured many others on April 27, 2025. The Canadian Prime Minister visited the site on the eve of a federal election, expressing solidarity with the Filipino community. Kai-Ji Adam Lo, 30, was charged with second-degree murder after allegedly ramming his vehicle into the crowd. The festival, celebrating Filipino hero Datu Lapu-Lapu, was meant to honor cultural heritage but turned into a scene of devastation. Both local leaders and Philippine President Ferdinand Marcos Jr. have expressed sympathy, with efforts ongoing to support the victims’ families. Story in A12, “Ramming suspect in Pinoys’ Canada festival attack charged.” AP PHOTOS
SPENDING of the national government grew by 13.8 percent to P822 billion as of the end of February 2025 from P722.5 billion a year ago. The DBM said higher infrastructure and other capital outlays, allotment to LGUs, maintenance and other operating expenses (MOOE) and interest payments fueled government spending during the two-month period. Interest payments jumped by 25.3 percent year-on-year to P152.9 billion from P122 billion See “Infraspend,” A9
PESO EXCHANGE RATES n US 56.3450 n JAPAN 0.3924 n UK 75.0177 n HK 7.2641 n CHINA 7.7331 n SINGAPORE 42.8610 n AUSTRALIA 36.0721 n EU 64.0248 n KOREA 0.0392 n SAUDI ARABIA 15.0245 Source: BSP (April 28, 2025)