“The Philippines Plans to Issue US Dollar-Denominated Sukuk Bonds as Part of Financial Diversification Strategy”
The Bureau of Treasury (BTr) has revealed plans to issue a 5.5-year benchmark-sized sukuk offering in US dollars, appointing major financial institutions such as Citigroup, Deutsche Bank, Dubai Islamic Bank, HSBC, MUFG, and Standard Chartered Bank to facilitate talks with fixed-income investors across Asia, Europe, the Middle East, and the United States. The discussions commenced on Monday (November 27).
Finance Secretary Benjamin Diokno has emphasized the government’s goal of raising $1 billion through sukuk bonds as part of its strategy to diversify financing sources and increase the investor base.
Market experts anticipate strong demand for the Philippines’ inaugural sukuk issue, citing favorable global market conditions and lower borrowing costs for issuers and investors. The sukuk market has seen significant growth over the years, with its value increasing from $9.6 billion in 2004 to $269.4 billion in 2013.
While traditionally appealing to Islamic investors, sukuk now attract interest from conventional investors as well. The global sukuk market has continued to expand, reaching $751.6 billion by the end of 2022, despite global monetary policy tightening.
As the Islamic finance industry is projected to grow at nearly 20% annually, the Philippines’ sukuk offering is poised to be a key milestone for the country’s financial market.
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