Daiwa Securities offers to help “Build, Build, Build” program

December 12, 2018

Daiwa Securities Group has offered to help provide funding for the Duterte administration’s “Build, Build, Build” program and continue its support for the Philippines’ future yen-denominated bond issuances in the Japanese market, the Department of Finance (DOF) said on Wednesday.

In a meeting with Finance Secretary Carlos Dominguez III, top executives of Daiwa Securities led by its chairman Takashi Hibino said the bank “could be of help in terms of financing” to further accelerate infrastructure investments in in the second half of President Rodrigo Duterte’s administration.

Hibino also told Dominguez Daiwa “is ready” for the Philippines’ next Samurai bond float and advised that the government should issue such bonds at least once a year--even if just modest amounts--to reach more investors.

Dominguez, in turn, thanked Daiwa for its “invaluable” assistance that led to the Philippines’ successful return to the Japanese market last August with its Samurai bonds after an eight-year absence.

Also present at the meeting held recently in Bali, Indonesia were Daiwa officials Yuichi Akai, Senior Executive Managing Director, Head of Global Investment Banking; Masaaki Amma, Senior Advisor to the Board, Global Investment Banking Division; and Sushin Osada, Associate Director, Investment Banking/Debt Capital Markets, Daiwa Capital Markets Singapore.

The Philippines’ multi-tranche issue was the largest Samurai transaction in Asia at 154.2 billion yen.

The 3-year tranche was priced 25 basis points (bps) above the benchmark, the 5-year at 35bps and the 10-year tranche at 60bps. It was the first time in almost 20 years that the government issued Samurai bonds on a stand-alone basis.

Dominguez told Daiwa executives the Philippine government was looking forward to its partnership with Daiwa in future offshore transactions.

He said the Duterte administration would further scale up its infrastructure program to continue stimulating the economy amid global uncertainties triggered by the escalating US-China trade tensions and the Federal Reserve’s move to normalize monetary policy through successive interest rate increases.

Dominguez noted the biggest high-impact infrastructure project that the Duterte administration is determined to implement--the Philippines’ first-ever subway--is being funded by Japan.

“It is more important for us now to continue stimulating the economy by doing the infra program. That is our counter-cyclical approach,” Dominguez told the Daiwa officials during the meeting.  “We will be tapping the international markets for bond financing so it’s a perfect fit and we hope your organization can continue supporting us.”

Daiwa’s presence in the Philippines dates back to 1995, when it established a joint venture with the Development Bank of the Philippines (DBP)--the DBP-Daiwa Capital Markets Philippines--that now provides investment banking advisory services. DMS