Philippines Sells $2.35 Billion of Bonds As It Fights Pandemic

(Bloomberg) -- The Philippines raised $2.35 billion in a bond sale, becoming the latest emerging nation to pay up for funds as governments seek to shield their economies from the coronavirus pandemic.

The Southeast Asian nation, which is facing its worst deficit ratio in two decades, issued the securities in two parts. The 10-year notes were priced to yield 180 basis points over Treasuries, up from 110 basis points when it sold a similar note in January of last year.

Emerging nations are selling bonds at record pace across dollars and euros to boost coffers to combat the pandemic and weather a global recession triggered by lockdowns to halt its spread. The Philippines expects its budget deficit this year to widen to 5.3% of gross domestic product from about 3.6% in 2019. The projected deficit ratio would be the most since at least 2000, based on Finance Department data.

President Rodrigo Duterte said Monday the nation is considering a relaxation in some restrictions in place since the middle of March to contain the outbreak.

Recent fundraising by Indonesia and Middle Eastern nations indicates a resurgence of investor appetite following a string of central bank steps after last a global sell-off last month, which all but closed the market for developing borrowers.

The Philippines central bank has deployed a range of measures including buying government debt directly and in the secondary market to bolster investor confidence.

©2020 Bloomberg L.P.

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