424B3

424B3 1 d947970d424b3.htm 424B3 424B3

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-249557

The information in this preliminary prospectus supplement is not complete and may be changed. A registration statement relating to these securities has been declared effective by the Securities and Exchange Commission. This preliminary prospectus supplement is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION DATED APRIL 19, 2021

PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 20, 2020

LOGO

Republic of the Philippines

€ % Global Bonds due

The Republic of the Philippines (the “Republic”) is offering € in aggregate principal amount of its % bonds due (the “ global bonds”), € in aggregate principal amount of its % bonds due (the “ global bonds”) and € in aggregate principal amount of its % bonds due (the “ global bonds”). We refer to the global bonds, the global bonds and the global bonds collectively as the “global bonds”. The Republic will pay interest (i) on the global bonds on of each year, commencing on , 2022, (ii) on the global bonds on of each year, commencing on , 2022 and (iii) on the global bonds on of each year, commencing on , 2022. The Republic may not redeem the global bonds prior to their maturity. The global bonds, global bonds and the global bonds will mature at par on , and , respectively. The offering of the global bonds of each series, each pursuant to this prospectus supplement, are not conditioned upon one another.

The global bonds will be the direct, unconditional, unsecured and general obligations of the Republic and will rank without any preference among themselves and equally with all other present and future unsecured and unsubordinated external indebtedness of the Republic. It is understood that this provision shall not be construed so as to require the Republic to make payments under the global bonds ratably with payments being made under any other external indebtedness of the Republic.

The global bonds will be designated Collective Action Securities issued under a fiscal agency agreement, as supplemented, and constitute a separate series of debt securities under the fiscal agency agreement. The fiscal agency agreement contains provisions regarding future modifications to the terms of the global bonds that differ from those applicable to the Republic’s outstanding external public indebtedness issued prior to February 1, 2018. Under these provisions, which are described in the section entitled “Collective Action Securities,” on page 19 of the accompanying prospectus, the Republic may, among other things, amend the payment provisions of any series of debt securities (including the global bonds) and other reserve matters listed in the fiscal agency agreement with the consent of the holders of: (i) with respect to a single series of debt securities, more than 75% of the aggregate principal amount of the outstanding debt securities of such series; (ii) with respect to two or more series of debt securities, if certain “uniformly applicable” requirements are met, more than 75% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate; or (iii) with respect to two or more series of debt securities, more than 66^²⁄₃% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate, and more than 50% of the aggregate principal amount of the outstanding debt securities of each series affected by the proposed modification, taken individually.

The offering of the global bonds is conditional on the receipt of certain approvals of the Monetary Board of the Bangko Sentral ng Pilipinas, the central bank of the Republic.

The global bonds are being offered globally for sale in the jurisdictions where it is lawful to make such offers and sales. Application will be made to admit the global bonds to listing on the Official List of the Luxembourg Stock Exchange and to trading on the Euro MTF Market (“Euro MTF”). We cannot guarantee that the application to the Luxembourg Stock Exchange will be approved, and settlement of the global bonds is not conditional on obtaining the listing. This prospectus supplement together with the accompanying prospectus dated November 20, 2020 constitute a prospectus for the purpose of Part IV of the Luxembourg law on prospectuses for securities dated July 16, 2019.

We expect to deliver the global bonds to investors in registered book-entry form only through the facilities of Clearstream Banking, S.A. (“Clearstream, Luxembourg” or “Clearstream”), and Euroclear Bank, SA/NV (“Euroclear” or the “Euroclear System”), on or about , 2021.

20 Global
Bonds

Per
Bond

Total

Per
Bond

Total

Per
Bond

Total

Price to investors

€

Underwriting discounts and commissions

€

Proceeds, before expenses, to the Republic

€

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Joint Lead Managers and Joint Bookrunners


BNP PARIBAS		Credit Suisse		Goldman Sachs		J.P. Morgan		Nomura		Standard Chartered Bank

The date of this prospectus supplement is , 2021.

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TABLE OF CONTENTS


Prospectus Supplement		Pages

INTRODUCTORY STATEMENTS		S-1
SUMMARY OF THE OFFERING		S-3
USE OF PROCEEDS		S-7
RECENT DEVELOPMENTS		S-8
DESCRIPTION OF THE GLOBAL BONDS		S-55
GLOBAL CLEARANCE AND SETTLEMENT		S-60
TAXATION		S-61
UNDERWRITING		S-65
LEGAL MATTERS		S-70
GENERAL INFORMATION		S-70
WHERE YOU CAN FIND MORE INFORMATION		S-71
AUTHORIZED REPRESENTATIVE IN THE UNITED STATES		S-72

TABLE OF CONTENTS



Prospectus		Pages

ABOUT THIS PROSPECTUS		2

FORWARD-LOOKING STATEMENTS		3

DATA DISSEMINATION		4

USE OF PROCEEDS		5

RATINGS		6

DESCRIPTION OF THE SECURITIES		7

Description of the Debt Securities		7

Description of the Warrants		16

Limitations on Issuance of Bearer Debt Securities		17

Ranking Provisions of the Debt Securities		18

COLLECTIVE ACTION SECURITIES		19

TAXATION		25

PLAN OF DISTRIBUTION		35

VALIDITY OF THE SECURITIES		37

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES		38

EXPERTS; OFFICIAL STATEMENTS AND DOCUMENTS		39

FURTHER INFORMATION		40

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You should read this prospectus supplement along with the prospectus that accompanies it. You should rely only on the information contained or incorporated by reference in this document and the accompanying prospectus or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. This document and the accompanying prospectus may only be used for the purposes for which they have been published. The information in this prospectus supplement and the accompanying prospectus may only be accurate as of the date of this prospectus supplement or the accompanying prospectus, as applicable. Terms used herein but not otherwise defined shall have the meaning given to them in the prospectus that accompanies this prospectus supplement.

INTRODUCTORY STATEMENTS

The Republic accepts responsibility for the information that is contained in this prospectus supplement and the prospectus that accompanies it. To the best of the knowledge and belief of the Republic (which has taken all reasonable care to ensure that such is the case), the information contained in this prospectus supplement and the accompanying prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Republic is a foreign sovereign state. Consequently, it may be difficult for you to obtain or realize upon judgments of courts in the United States against the Republic. See “Description of the Securities—Description of the Debt Securities—Jurisdiction and Enforceability” in the accompanying prospectus.

The distribution of this prospectus supplement and the accompanying prospectus and the offering of the global bonds may be legally restricted in some countries. If you wish to distribute this prospectus supplement or the accompanying prospectus, you should observe any applicable restrictions. This prospectus supplement and the accompanying prospectus should not be considered an offer, and it is prohibited to use them to make an offer, in any state or country in which the making of the offering of the global bonds is prohibited. For a description of some restrictions on the offering and sale of the global bonds and the distribution of this prospectus supplement and the accompanying prospectus, see “Underwriting” on page S-[65].

This document is only being distributed to and is only directed at (A) persons who are outside the United Kingdom and (B) persons in the United Kingdom that are qualified investors within the meaning of Article 2(e) of the Prospectus Regulation that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The global bonds are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such global bonds will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Notification under Section 309B(1) of the Securities and Futures Act, Chapter 289 of Singapore—The global bonds are prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS Notices SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

All references in this prospectus supplement (a) to the “Republic” or the “Philippines” are to the Republic of the Philippines, (b) to the “Government” are to the national government of the Philippines and (c) to “Bangko Sentral” or “BSP” are to Bangko Sentral ng Pilipinas, the central bank of the Philippines.

Unless otherwise indicated, all references in this prospectus supplement to “₱” are to the lawful national currency of the Philippines, those to “dollars,” “U.S. dollars,” “US$” or “$” are to the lawful currency of the

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United States of America, and those to “Euro”, “EUR” or “€” are to the currency introduced at the start of the third stage of the European Economic and Monetary Union pursuant to the Treaty establishing the European Community.

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SUMMARY OF THE OFFERING

This summary highlights information contained elsewhere in this prospectus supplement and the accompanying prospectus. You should read the entire prospectus supplement and the accompanying prospectus carefully.

Issuer

Republic of the Philippines.

Bonds

The € % global bonds due (the “20 global bonds”), the € % global bonds due (the “20 global bonds”), and the € % global bonds due (the “20 global bonds” and, together with the 20 global bonds and the 20 global bonds, the “global bonds”).

Interest

The 20 global bonds will bear interest at % from , 2021, payable annually in arrears.

Issue Date

The 20 global bonds: , 2021.

Interest Payment Dates

of each year, payable to the persons who are registered holders thereof at the close of business on the preceding , whether or not a business day; provided that so long as the global bonds are settled through the facilities of Clearstream and Euroclear, the record date shall be the close of business (in the relevant clearing system) on the Business Day before the relevant interest payment date, where Business Day means a day on which the relevant clearing system is open for business.

For the 20 global bonds, the first interest payment will be made on , 2022 in respect of the period from (and including) , 2021 to (but excluding) , 2022.

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Maturity Date

The 20 global bonds:

Issuer Redemption

The Republic may not redeem the global bonds prior to maturity.

Status of Bonds

The global bonds will be direct, unconditional, unsecured and general obligations of the Republic and will rank without any preference among themselves and equally with all other present and future unsecured and unsubordinated External Indebtedness (as defined in the accompanying prospectus) of the Republic. It is understood that this provision shall not be construed so as to require the Republic to make payments under the global bonds ratably with payments being made under any other external indebtedness of the Republic. The full faith and credit of the Republic will be pledged for the due and punctual payment of all principal and interest on the global bonds. See “Description of the Securities—Description of the Debt Securities—Status of Bonds” in the accompanying prospectus.

Negative Pledge

With certain exceptions, the Republic has agreed that it will not create or permit to subsist any Lien (as defined in the accompanying prospectus) on its revenues or assets to secure External Public Indebtedness (as defined in the accompanying prospectus) of the Republic, unless at the same time or prior thereto, the global bonds are secured at least equally and ratably with such External Public Indebtedness. The international reserves of Bangko Sentral represent substantially all of the official gross international reserves of the Republic. Because Bangko Sentral is an independent entity, the Republic and Bangko Sentral believe that the international reserves owned by Bangko Sentral are not subject to the negative pledge covenant in the global bonds and that Bangko Sentral could in the future incur External Public Indebtedness secured by such reserves without securing amounts payable under the global bonds. See “Description of the Securities—Description of the Debt Securities—Negative Pledge Covenant” in the accompanying prospectus.

Taxation

The Republic will make all payments of principal and interest in respect of the global bonds free and clear of, and without withholding or deducting, any present or future taxes of any nature imposed by or within the Republic, unless required by law. In that event, the Republic will pay additional amounts so that the holders of the global bonds receive the amounts that would have been received by them had no withholding or deduction been required, subject to certain exceptions. See “Description of the Securities—Description of the Debt Securities—Additional Amounts” in the accompanying prospectus.

Collective Action Clauses

The global bonds will be designated Collective Action Securities issued under a fiscal agency agreement, as supplemented, and

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constitute a separate series of debt securities under the fiscal agency agreement. The fiscal agency agreement contains provisions regarding future modifications to the terms of the global bonds that differ from those applicable to the Republic’s outstanding external public indebtedness issued prior to February 1, 2018. Under these provisions, which are described in the section entitled “Collective Action Securities,” on page 19 of the accompanying prospectus, the Republic may, among other things, amend the payment provisions of any series of debt securities (including the global bonds) and other reserve matters listed in the fiscal agency agreement with the consent of the holders of: (i) with respect to a single series of debt securities, more than 75% of the aggregate principal amount of the outstanding debt securities of such series; (ii) with respect to two or more series of debt securities, if certain “uniformly applicable” requirements are met, more than 75% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate; or (iii) with respect to two or more series of debt securities, more than 66²⁄₃% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate, and more than 50% of the aggregate principal amount of the outstanding debt securities of each series affected by the proposed modification, taken individually.

Cross-Defaults

Events of default with respect to the global bonds include (i) if the Republic fails to make a payment of principal, premium, prepayment charge or interest when due on any External Public Indebtedness with a principal amount equal to or greater than $25,000,000 or its equivalent, and this failure continues beyond the applicable grace period; or (ii) if any External Public Indebtedness of the Republic or the central monetary authority in principal amount equal to or greater than $25,000,000 is accelerated, other than by optional or mandatory prepayment or redemption. See “Collective Action Securities—Events of Default: Cross Default and Cross Acceleration” in the accompanying prospectus.

Listing

The Republic is offering the global bonds for sale in the United States and elsewhere where such offer and sale is permitted. Application will be made to admit the global bonds to listing on the Official List of the Luxembourg Stock Exchange and to trading on the Euro MTF. The Republic cannot guarantee that the application to the Luxembourg Stock Exchange will be approved, and settlement of the global bonds is not conditional on obtaining the listing.

Form, Denomination and Registration

The global bonds will be issued in fully registered form in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. The global bonds will be represented by one or more global securities registered in the name of a nominee of, and deposited with, the common depositary for Euroclear and Clearstream. Beneficial

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interests in the global securities will be shown on, and the transfer thereof will be effected only through, records maintained by Euroclear and Clearstream and their respective participants.

Settlement of all secondary market trading activity in the global bonds will be made in immediately available funds. See “Description of the Securities—Description of the Debt Securities—Global Securities” in the accompanying prospectus and “Global Clearance and Settlement.”

Further Issues

The Republic may from time to time, without notice to or the consent of the registered holders of the global bonds, issue further bonds which will form a single series with the global bonds. See “Collective Action Securities—Further Issues of Debt Securities” in the accompanying prospectus.

Use of Proceeds

The Republic intends to use the net cash proceeds from the sale of the global bonds for general purposes of the Republic, including budgetary support.

Fiscal Agent

The Bank of New York Mellon (as successor in interest to JPMorgan Chase Bank, N.A.).

London Paying Agent

The Bank of New York Mellon, London Branch

Transfer Agent and Registrar

The Bank of New York Mellon SA/NV, Luxembourg Branch

Governing Law

The fiscal agency agreement and the global bonds will be governed by and interpreted in accordance with the laws of the State of New York. The laws of the Republic will govern all matters governing authorization and execution of the fiscal agency agreement and the global bonds by the Republic.

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USE OF PROCEEDS

The Republic intends to use the net cash proceeds from the sale of the global bonds for general purposes of the Republic, including budgetary support. None of the underwriters shall have any responsibility for the application of the net cash proceeds from the sale of the global bonds.

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RECENT DEVELOPMENTS

The information contained in this section supplements the information about the Republic corresponding to the headings below that is contained in Exhibit 99.D to the Republic’s annual report on Form 18-K for the fiscal year ended December 31, 2019. To the extent the information in this section differs from the information contained in such annual report, you should rely on the information in this section. Capitalized terms not defined in this section have the meanings ascribed to them in the annual report.

Selected Economic Information of the Republic of the Philippines


	2016			2017			2018			2019			2020			2021
	(₱ *in billions, except as indicated)*
GDP (at then-current market prices)		15,132.4			16,556.7			18,625.2			19,517.9			17,938.6			N/A
GDP (at constant 2018 prices)		16,062.7			17,176.0			18,625.2			19,382.8			17,527.2			N/A
GDP per capita, PPP concept (in $ at then-current market prices)⁽¹⁾		7,806			8,348			8,943			9,961			8,437			N/A
GDP growth rate (%)		7.1	%		6.9	%		6.3	%		6.1	%		(9.6	)%		N/A
Consumer price inflation rate (2012 CPI basket)		1.3	%		2.9	%		5.2	%		2.5	%		2.6	%		4.5	%⁽²⁾
Government surplus/(deficit) as % of GDP (at then-current market prices)		(2.3	)%		(2.1	)%		(3.1	)%		(3.4	)%		(7.6	)%		N/A
Government debt at end of period as % of GDP (at then-current market prices)		40.2	%		40.2	%		39.9	%		39.6	%		54.6	%		N/A
Public sector borrowing requirement⁽³⁾		(320.4	)		(319.1	)		(547.3	)		(640.4	)		(833.2	)⁽⁴⁾		N/A
Consolidated public sector financial position⁽⁵⁾		(21.8	)		(4.6	)		(171.0	)		(257.5	)		(521.5	)⁽⁴⁾
Current account surplus/(deficit) as % of GDP (at then-current market prices)		(0.4	)%		(0.7	)%		(2.6	)%		(0.8	)%		3.6	⁽⁴⁾%		N/A
Overall balance of payments position at end of period as % of GDP (at then-current market prices)⁽⁶⁾		(0.3	)%		(0.3	)%		(0.7	)%		2.1	%		4.4	%		N/A
Direct domestic debt of the Government (in million ₱)⁽⁷⁾⁽⁸⁾		3,934,097			4,441,260			4,776,859			5,127,600			6,694,687			7,363,068	⁽⁹⁾
Direct external debt of the Government (in million $)^(8)(10)		43,324			44,261			47,860			51,252			64,562			62,540	⁽⁹⁾
Public sector domestic debt (in billion ₱)⁽¹¹⁾		5,006.2			5,830.7			6,065.3			6,307.7			6,314.9	⁽¹²⁾		N/A
Public sector external debt (in billion ₱)^(10)(11)		2,507.4			2,562.4			2,891.8			2,966.9			3,127.8	⁽¹²⁾		N/A
Unemployment rate (%)		5.5			5.7			5.3			5.4			8.7	⁽¹³⁾		8.8	⁽¹⁴⁾
Gross international reserves (in billion $)^(8)(15)		80.7			81.6			79.2			87.8			110.1			104.8	⁽¹⁶⁾

Sources: Philippine Statistics Authority; Bureau of the Treasury; Department of Finance, Bangko Sentral.

Notes:

(1)	Amounts in pesos have been translated into U.S. dollars using the average Bangko Sentral reference exchange rates for the applicable period.

(2)	Preliminary data for the two months ended February 28, 2021.

(3)	Represents the aggregate deficit or surplus of the Government, the Central Bank-Board of Liquidation (the “CB-BOL”), the Oil Price Stabilization Fund and the major GOCCs (as defined below), the debt of which comprises virtually all the debt incurred by GOCCs.

(4)	Preliminary data for the nine months ended September 30, 2020.

(5)	Comprises the aggregate deficit or surplus of the Government, the CB-BOL’s accounts, the major GOCCs, the Social Security System, the Government Service Insurance System, Bangko Sentral, the GFIs and local government units.

(6)	Overall balance of payments has been revised to reflect late reports, post-audit adjustments and final data from companies. See “Republic of the Philippines—Balance of Payments—Revisions” for a more detailed discussion of recent and pending revisions to previously reported data.

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(7)

Represents debt of the Government only, and does not include other public sector debt. Includes direct debt obligations of the Government, the proceeds of which are on-lent to GOCCs and other public sector entities, but excludes debt guaranteed by the Government and debt originally guaranteed by other public sector entities for which the guarantee has been assumed by the Government.

(8)	Amounts in original currencies were translated into U.S. dollars or pesos, as applicable, using the Bangko Sentral reference exchange rates at the end of each applicable period.

(9)	Data as of February 28, 2021.

(10)	Represents debt of the Government, the major GOCCs, the CB-BOL, Bangko Sentral and the GFIs.

(11)	Includes public sector debt, whether or not guaranteed by the Government.

(12)	Preliminary data as of June 30, 2020.

(13)	Preliminary data as of October 2020 based on the 2020 Annual Estimates of Labor Force Survey October rounds.

(14)	Preliminary results as of February 2021 based on the 2021 Annual Estimates of Labor Force Survey February rounds.

(15)	Comprises the holdings by Bangko Sentral of gold reserves, foreign investments, foreign exchange and SDRs, including Bangko Sentral’s reserve position in the IMF.

(16)	Preliminary data as of March 31, 2021.

History, Land and People

2020 Census

The Republic’s 2020 Census was scheduled to begin in May 2020; however, following postponements due to restrictions imposed as a result of the COVID-19 pandemic, work finally began on September 1, 2020. The Republic’s 2020 Census is expected to involve over 100,000 data enumerators and 22,000 census supervisors. Completion of the census is targeted for May 2021, although further delays are possible due to challenges arising from the COVID-19 pandemic.

Comprehensive Tax Reform Program

Package 2 under the Comprehensive Tax Reform Program, known as the Corporate Recovery and Tax Incentives for Enterprise (“CREATE”) Act (previously known as the CITIRA bill or the TRABAHO bill), was signed into law as Republic Act No. 11534 by President Duterte on March 26, 2021. The CREATE Act is intended to provide economic stimulus by way of reducing the corporate income tax rate to 25% or 20% subject to certain conditions, from the original 30% under the Tax Code. The CREATE Act also provides for changes to the Philippines’ fiscal incentive policies and seeks to improve the governance of fiscal incentives by placing their management under the Fiscal Incentives Review Board.

Credit Ratings

In January 2021, Fitch affirmed the Republic’s BBB rating, with a stable outlook. Fitch stated that its affirmation reflects the Republic’s modest government debt relative to its peers, robust external buffers, and relatively strong medium-term growth prospects despite the contraction of the economy caused by the COVID-19 pandemic. In March 2021, Moody’s assigned a Baa2 rating to the Republic’s Japanese yen-denominated bond offering, which mirrored the Philippines’ Baa2 rating that was affirmed in July 2020.

Internal Conflict with Rebel Groups and Peace Negotiations

In July 2020, President Duterte signed into law the Anti-Terrorism Act of 2020, which replaces the Human Security Act of 2007. Among its various provisions, the Anti-Terrorism Act of 2020 provides for warrantless arrests under certain circumstances and broadly defines terrorist acts, and creates a presidentially-appointed body, the Anti-Terrorism Council (“Anti-Terrorism Council”), which can designate individuals or groups as terrorists for purposes of the Anti-Terrorism Act of 2020. The Anti-Terrorism Act of 2020 is currently being challenged before the Supreme Court, which heard oral arguments from the petitioners between February and March 2021. A final decision from the Supreme Court is still pending on this matter.

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The Moro Islamic Liberation Front

In February 2021, President Duterte issued presidential proclamations granting amnesty to members of the MILF and MNLF, among other rebel groups. This amnesty excludes individuals charged with terrorism under the Human Security Act of 2007 or the Anti-Terrorism Act of 2020, individuals designated as terrorists by the Anti-Terrorism Council, or those who had committed certain crimes under Philippine law or violated the Geneva Convention of 1949. Congressional approval is required for this amnesty to become effective, and it is still under review by Congress.

The Moro National Liberation Front

In November 2020, the MNLF elected Muslimin Sema to replace Nur Misuari as MNLF Central Committee Chairman. Mr. Sema has issued statements professing his commitment to work with the MILF and the Republic in order to achieve a lasting peace in the Bangsamoro areas of Mindanao.

Abu Sayyaf

Skirmishes between AFP forces and Abu Sayyaf members have continued into 2021. In March 2021, AFP troops tracked down and killed Abu Sayyaf leader Majan Sahidjuan in Tawi-Tawi province and rescued certain Indonesian hostages, who were later turned over to the Indonesian government.

Marawi Siege

According to unofficial data provided by the Office of Task Force Marawi, the total cost of damages of the Marawai Siege was approximately ₱11.5 billion. Since 2018, the Government has focused on rebuilding Marawi City. In August 2018, the Government and the MILF revived a cooperation agreement, originally entered into during the siege for the purposes of rescuing civilians. Under the revived pact, MILF and the Government will work together in an effort to rehabilitate Marawi City. In 2020, a budget of ₱3.56 billion was approved to rehabilitate Marawi City. In March 2021, the Office of Task Force Marawi reported good progress in the rehabilitation of Marawi City, with efforts on track for completion by December 2021.

Communists and Affiliated Groups

On April 21, 2020, NPA forces attacked AFP soldiers during a COVID-19 humanitarian mission, resulting in the deaths of two AFP solders and wounding three others. On April 27, 2020, President Duterte announced that peace negotiations with the CPP-NPA-NDF would be permanently terminated. On December 9, 2020, the Anti-Terrorism Council designated the CPP and NPA as terrorist organizations under the Anti-Terrorism Act of 2020, which will allow for the detention of their members and the freezing of their assets, among other things.

In February 2021, President Duterte signed a presidential proclamation granting amnesty to former rebel members of the CPP-NPA-NDF who had voluntarily surrendered and renounced their rebellious activities. Congressional approval is required for this amnesty to become effective, and it is still under review by Congress.

International Relations

World Bank Financing and Projects

On March 11, 2021, the World Bank approved an additional $500 million in funding to support the Republic’s program to purchase and distribute COVID-19 vaccines, strengthen the country’s health systems and overcome the impact of the COVID-19 pandemic.

Asian Development Bank Financing and Projects

In March 2021, the ADB, along with the AIIB, agreed to co-finance an aggregate amount of $700 million in loans to the Republic intended to fund the procurement of approximately 110 million doses of COVID-19

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vaccines from the World Health Organization’s COVID-19 Vaccines Global Access Facility (“COVAX”), as well as other eligible bilateral vaccine suppliers. The ADB’s commitment under this program totaled $400 million out of the total $700 million, with the remaining $300 million to be funded by the AIIB.

Territorial Dispute over the West Philippine Sea

In 2021, the Philippines continued to assert its rights against Chinese incursions into the West Philippine Sea. In January 2021, the Philippines issued diplomatic protests against a new Chinese law that purportedly authorized China’s coast guard to open fire on foreign vessels and to dismantle structures built on certain islands. In March 2021, the Philippines demanded that China recall over 200 Chinese militia vessels that were identified near a disputed reef located within the Philippines’ exclusive economic zone.

These developments have not had any immediate effect on the Philippine economy or on economic relations between the Philippines and China.

Visiting Forces Agreement

In February 2021, the Philippines resumed discussions with the United States on the VFA. The Philippines continues to value its decades-old partnership with the United States as its lone mutual defense treaty ally and continues to maintain robust relations with United States.

Natural Disasters

Climate Change

Climate change has been identified as a threat to the Philippine economy, as it is dependent on climate sensitive sectors such as agriculture, tourism and energy. A change in the climate may have several consequences, including lower agriculture productivity, damage to coastal infrastructure, fragile ecosystems, impact on health and biodiversity, financial market disruption, lower GDP and altered migration matters. Increased frequency or severity of natural disasters may lead to casualties, the destruction of crops and livestock, the outbreak of waterborne disease and the destruction of infrastructure, such as roads and bridges. Droughts may negatively affect the supply of agricultural commodities, the food supply in general and the generation of hydroelectric power.

Philippine Economy

COVID-19

COVID-19, an infectious disease that was first reported to have been transmitted to humans in late 2019, has spread globally over the course of 2020, and in March 2020 it was declared as a pandemic by the World Health Organization. On January 30, 2020, the Philippines reported its first confirmed case of COVID-19. The subsequent spread of the disease has since resulted in 840,554 confirmed cases and the death of 14,520 people in the Philippines as of April 9, 2021, according to the Philippine Department of Health. The Government, on a national and local level, has implemented a number of measures in varying degrees to contain the spread of COVID-19, including, among others, social distancing measures, implementation of self-isolation and community quarantine measures, closure of schools, suspension of mass public transport facilities, restrictions on public gatherings, suspension of operations of non-essential businesses and travel restrictions.

On March 27, 2021, following a sharp spike in new COVID-19 infections, the Government announced that the Manila metropolitan area and the surrounding provinces of Bulacan, Laguna, and Rizal, as well as other parts of the Philippines, would be placed under modified enhanced community quarantine from March 29 to April 4, and this date was subsequently extended until at least April 30, 2021.

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Legislative Efforts to Combat COVID-19

President Duterte’s emergency powers under Republic Act No. 11494, otherwise known as the “Bayanihan to Recover as One Act”, lapsed on December 19, 2020. To date, these emergency powers have not been renewed.

On December 29, 2020, President Duterte signed Republic Act No. 11519 and Republic Act No. 11520 into law. Republic Act No. 11519 extended the availability of funds appropriated through the Bayanihan to Recover as One Act until June 30, 2021. Republic Act No. 11520 extended the availability of the 2020 budget until December 31, 2021, which enables government agencies to spend or release unused funds under the 2020 budget during the course of 2021, rather than expiring at the end of 2020, which would have otherwise been the case.

Republic Act No. 11523, the Financial Institutions Strategic Transfer (FIST) Act (the “FIST Act”) was signed into law on February 16, 2021, and became effective on February 17, 2021. The FIST Act is intended to assist banks and other financial institutions by enabling them to sell their non-performing assets and bad loans to asset management companies, referred to as FIST corporations. It aims to strengthen the banking industry’s risk-bearing capacity, and free up capital for productive uses in the economy rather than the management of non-performing loans.

In addition to the above measures, which have already been adopted, at least two bills are currently pending before Congress that are intended to bolster the Government’s ability to combat the effects of the COVID-19 pandemic.

First, on February 4, 2021, House Bill 8628, otherwise known as the “Bayanihan to Arise As One Act” or the “Bayanihan 3 Act”, was filed in the House of Representatives. The Bayanihan 3 Act proposes the disbursement of an additional ₱420 billion for COVID-19 response measures, as well as recovery interventions grounded on economic inclusivity and collective growth. The ₱420 billion is proposed to be allocated as follows: ₱108 billion for additional social amelioration to impacted households, ₱100 billion for capacity-building for impacted sectors, ₱52 billion for wage subsidies, ₱70 billion for capacity-building for agricultural producers, ₱30 billion for internet allowances to students and teachers, ₱30 billion for assistance to displaced workers, ₱25 billion for COVID-19 treatments and vaccines, and ₱5 billion for the rehabilitation of areas impacted by recent floods and typhoons. The bill also proposes the creation of a joint executive and legislative “Bayanihan Council” that will ensure the effective disbursement of the funds. On 25 March 2021, the bill was referred to the Committee on Economic Affairs of the House of Representatives.

Second, the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (“GUIDE”) Act bill is also pending before Congress. The GUIDE bill is intended to enable government financial institutions to form special holding companies that will infuse equity, but subject to strict conditions, into strategically important companies facing insolvency. The GUIDE bill proposes a ₱55-billion allocation to the Philippine Guarantee Corporation, Development Bank of the Philippines, and Land Bank of the Philippines, so that they can grant more loans to micro-, small-, and medium-sized enterprises. On February 9, 2021, the House of Representatives approved the bill. The bill still must be approved by the Senate and signed into law by the President before it becomes effective.

COVID-19 Vaccination Efforts

In January 2021, the Department of Health unveiled its Philippine National Deployment and Vaccination Plan for COVID-19 Vaccines. As part of this plan, the Government secured initial doses of vaccines from various manufacturers and participated in the World Health Organization’s COVAX facility in order to increase the Republic’s access to vaccine supplies.

In February 2021, the IATF adopted a vaccination priority framework conceived by the Interim National Immunization Technical Advisory Group to promote the effective deployment of the Republic’s vaccination efforts in light of the limited supply of vaccines. On February 26, 2021 President Duterte signed into law the

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COVID-19 Vaccination Program Act of 2021, which authorized local government units to undertake negotiated procurement of COVID-19 vaccines, and also authorized private entities, including the Philippine Red Cross, to procure vaccines in coordination with the Government.

On March 1, 2021, the Government began its mass vaccination drive, with vaccines being administered to frontline health care professionals followed by eligible senior citizens. As of April 10, 2021, the Food and Drug Administration had granted emergency use authorization to four COVID-19 vaccines. As of March 30, 2021, a total of 1,468,200 doses of COVID-19 vaccines had been delivered to the Government, and 737,569 people had received at least one dose of the COVID-19 vaccine in the Philippines.

Economic Impacts

The COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers have disrupted businesses and economic activities, and their impact on the economy continues to evolve. On January 28, 2021, the National Economic Development Authority reported that the Republic’s GDP had contracted by 9.5% in 2020 (subsequently revised downwards to a contraction of 9.6%), primarily as a result of the lockdowns during the second quarter of 2020, which led to a 16.9% contraction in the Republic’s GDP for that quarter.

In April 2021, the IMF world economic outlook projected that the Republic would see economic growth at 6.9% in 2021 despite the re-imposition of lockdown measures on certain parts of the Philippines in March 2021. However, these projections are subject to significant uncertainties, particularly in relation to the effects of the ongoing COVID-19 pandemic and the Government’s efforts to contain it. The National Economic Development Authority currently projects that a two-week quarantine in the Manila metropolitan area and nearby provinces would result in a 0.8 percentage point cut in the Republic’s GDP growth forecasts.

It is widely expected that the COVID-19 pandemic will continue to negatively affect the global economy and financial markets. However, the extent of the impact of COVID-19 on the Philippine economy and the speed and certainty of any economic recovery cannot be predicted, and any new surge in infections may result in stricter quarantine or lockdown measures across provinces, cities and municipalities, which may lead to further contraction of the Philippine economy, closure of businesses, and rise in unemployment rates. The situation continues to evolve, and the impact on the global and Philippine economy and the related government responses, including additional measures to be adopted by the Philippine national government and local government units, will depend on future developments which remain uncertain.

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Recent Economic Indicators

The following table sets out the performance of certain of the Republic’s principal economic indicators for the specified periods.

Years 2016—2021


	2016			2017			2018			2019			2020			2021
GDP growth rate (%)		7.1			6.9			6.3			6.1			(9.6	)		N/A
GNI growth (%) (at then-current market prices)		6.8			6.8			5.9			5.4			(11.4	)		N/A
Consumer price inflation rate (2012 CPI basket)		1.3			2.9			5.2			2.5			2.6			4.5	⁽¹⁾
Unemployment rate (%)		5.5			5.7			5.3			5.4			8.7	⁽²⁾		8.8	⁽³⁾
91-day T-bill rate (%)		1.5			2.1			3.5			4.7			2.0			1.0	⁽⁴⁾
External position
Balance of payments ($ million)		(1,038	)		(863	)		(2,306	)		7,843			16,022			(2,771	)⁽¹⁾
Export growth (%)		(2.4	)		19.7			0.9			4.9			(13.3	)		N/A
Import growth (%)		18.3			14.2			17.4			0.6			(24.5	)		N/A
External debt ($ billion)		74.8			73.1			79.0			83.6			98.5			N/A
International reserves
Gross ($ billion)		80.7			81.6			79.2			87.8			110.1			104.8	⁽⁵⁾
Net ($ billion)		81.0			81.6			79.2			87.8			110.1			104.8	⁽⁵⁾
Months of retained imports⁽⁶⁾		8.8			7.8			6.9			7.6			12.6			12.0
Domestic credit growth (%)		17.0			13.9			14.9			8.7	⁽⁷⁾		6.9	⁽⁸⁾		5.6	⁽⁴⁾

Sources: Philippine Statistics Authority, Bangko Sentral.

Notes:

(1)	Preliminary data for the two months ended February 28, 2021.

(2)	Preliminary data as of October 2020 based on the 2020 Annual Estimates of Labor Force Survey October rounds.

(3)	Preliminary results as of February 2021 based on the 2021 Annual Estimates of Labor Force Survey February rounds.

(4)	Based on preliminary data for the three months ended March 31, 2021.

(5)	Preliminary data as of March 31, 2021.

(6)	Number of months of average imports of goods and payments of services and primary income that can be financed by reserves.

(7)	Figure represents the average of the growth rates in each quarter in 2019.

(8)	Preliminary figure representing the average growth rates for each quarter in 2020.

In 2020, GDP contracted by 9.6%, compared with growth of 6.1% in 2019 at constant 2018 market prices. The largest contributor to the contraction in 2020 was the effect of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers. This resulted in a 9.2% contraction in the services sector in 2020, as compared with growth of 6.8% in 2019 at constant 2018 market prices, and a 13.2% contraction in the industry sector in 2020, as compared with growth of 5.2% in 2019 at constant 2018 market prices. GNI in 2020 contracted by 11.4%, compared to growth of 5.4% in 2019 at constant 2018 market prices. Net primary income contracted by 30.1% in 2020, compared to a contraction of 1.6% in 2019 at constant 2018 market prices.

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The following table shows GDP by sector, net primary income and GNI at current market prices for the specified periods.


	Gross Domestic Product by Major Sector (at current market prices)										Percentage of GDP
	2016		2017		2018		2019		2020		2016		2020
	(₱ *in millions, except as indicated)*										*(%)*
Agriculture, forestry, and fishing		1,544,279		1,685,956		1,762,616		1,721,539		1,827,010		10.2		10.18
Industry sector
Mining and quarrying		125,898		148,094		163,322		161,656		136,039		0.8		0.76
Manufacturing		2,964,479		3,228,580		3,488,331		3,614,016		3,170,117		19.6		17.67
Electricity, steam, water and waste management		466,222		505,119		557,030		607,881		610,953		3.1		3.41
Construction		1,026,382		1,106,154		1,373,841		1,535,727		1,177,114		6.8		6.56
Total		4,582,981		4,987,948		5,582,525		5,919,281		5,094,222		30.3		28.40
Service sector
Wholesale and retail trade; repair of motor vehicles and motorcycles		2,668,596		2,926,502		3,237,304		3,517,653		3,321,007		17.6		18.51
Transportation and storage		580,079		637,191		697,839		757,661		548,973		3.8		3.06
Accommodation and food service activities		304,557		346,119		403,289		431,778		253,656		2.0		1.41
Information and communication		473,142		490,330		515,925		562,834		592,818		3.1		3.30
Financial and insurance activities		1,193,651		1,326,583		1,498,147		1,681,870		1,822,568		7.9		10.16
Real estate and ownership of dwellings		995,629		1,076,332		1,189,673		1,255,644		1,078,017		6.6		6.01
Professional and business services		992,234		1,110,458		1,159,265		1,219,757		1,132,869		6.6		6.32
Public administration and defense; compulsory social activities		562,254		642,127		767,706		890,688		950,763		3.7		5.30
Education		591,081		649,366		731,607		778,868		715,250		3.9		3.99
Human health and social work activities		269,554		289,060		308,268		329,862		329,708		1.8		1.84
Other services		374,345		388,679		411,025		450,429		271,720		2.5		1.51
Total		9,005,122		9,882,747		10,920,048		11,877,043		11,017,351		59.5		61.42
Total GDP		15,132,381		16,556,651		18,265,190		19,517,863		17,938,582		100.0		100.00
Net primary income		1,680,553		1,826,528		1,947,159		1,954,197		1,381,265
Total GNI		16,812,934		18,383,179		20,212,349		21,472,060		19,319,848
Total GDP ($ billions)⁽¹⁾		304.9		316.6		330.9		383.7		374.2
Per capita GDP, PPP concept ($)⁽²⁾		7,806		8,348		8,943		9,961		8,574

Source: Philippine Statistics Authority.

Notes:

(1)	Calculated using the average exchange rate for the period indicated. See “—Monetary System—Foreign Exchange System.”

(2)	Figure represents annualized per capita GDP, PPP concept.

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The following table shows GDP by sector at constant 2018 market prices for the specified periods.


	Gross Domestic Product by Major Sector (at constant 2018 market prices)										Percentage of GDP
	2016		2017		2018		2019		2020		2016		2020
	(₱ *in millions, except as indicated)*										*(%)*
Agriculture, forestry and fishing sector		1,672,085		1,743,134		1,762,616		1,783,855		1,780,544		10.4		10.2
Industry sector
Mining and quarrying		156,807		160,065		163,322		168,857		136,940		1.0		0.8
Manufacturing		3,070,939		3,317,641		3,488,331		3,620,456		3,266,648		19.1		18.6
Electricity, steam, water and waste management		500,472		523,161		557,030		591,312		589,089		3.1		3.4
Construction		1,133,124		1,201,714		1,373,841		1,507,244		1,119,438		7.1		6.4
Total		4,861,342		5,202,582		5,582,525		5,887,869		5,112,115		30.3		29.2
Services sector
Wholesale and retail trade; repair of motor vehicles and motorcycles		2,861,060		3,057,552		3,237,304		3,489,299		3,279,285		17.8		18.7
Transportation and storage		604,328		648,153		697,839		742,347		512,769		3.8		2.9
Accommodation and food service activities		332,612		371,234		403,289		425,692		232,389		2.1		1.3
Information and communication		462,876		483,683		515,925		557,007		584,981		2.9		3.3
Financial and insurance activities		1,275,687		1,382,521		1,498,147		1,676,448		1,768,604		7.9		10.1
Real estate and ownership of dwellings		1,068,415		1,129,083		1,189,673		1,238,469		1,027,860		6.7		5.9
Professional and business services		1,011,910		1,117,257		1,159,265		1,182,159		1,064,318		6.3		6.1
Public administration and defense; compulsory social activities		610,575		666,393		767,706		871,564		911,354		3.8		5.2
Education		627,112		671,837		731,607		766,089		683,563		3.9		3.9
Human health and social work activities		290,083		309,316		308,268		323,261		310,930		1.8		1.8
Other services		384,590		393,233		411,025		438,691		258,523		2.4		1.5
Total		9,529,249		10,230,262		10,920,048		11,711,027		10,634,575		59.3		60.7
Total GDP		16,062,676		17,175,978		18,265,190		19,382,751		17,527,234		100.0		100.0

Source: Philippine Statistics Authority.

Principal Sectors of the Economy

Agriculture, Forestry, and Fishing Sector

The agriculture, forestry and fishing sector contributed approximately 10.2% to GDP in 2020 compared to approximately 10.4% to GDP in 2016, at constant 2018 market prices.

Production in the agriculture, forestry, and fishing sector contracted by 0.2% in 2020, compared to growth of 1.2% in 2019 at constant 2018 market prices. The largest contributor to the contraction in 2020 was the effect of the ongoing global COVID-19 pandemic, which contributed to reversals in other animal production and poultry and egg production from growth of 31.8% and 5.8%, respectively, in 2019 to contraction of 3.2% and 2.4%, respectively, in 2020 at constant 2018 market prices, as well as a 6.9% contraction in livestock production in 2020 compared to a lower, 0.8% contraction in 2019 at constant 2018 market prices. These effects were partially offset by a reversal in palay production from a 5.9% contraction in 2019 to a 3.1% growth in 2020 at constant 2018 market prices.

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Industry Sector

The industry sector consists of the mining and quarrying, manufacturing, electricity, steam, water and waste management and construction subsectors. The industry sector contributed approximately 29.2% to GDP in 2020 compared to approximately 30.3% to GDP in 2016, at constant 2018 market prices.

In 2020, the industry sector contracted by 13.2%, compared with growth of 5.2% in 2019 at constant 2018 market prices. The largest contributor to the contraction in 2020 was the effect of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers. This resulted in a 25.7% contraction in the construction subsector in 2020, as compared to a growth of 8.9% in 2019 at constant 2018 market prices, as well as a 9.8% contraction in the manufacturing subsector in 2020, as compared to a growth of 3.6% in 2019 at constant 2018 market prices.

Manufacturing Subsector

In 2020, the manufacturing subsector contracted by 9.8%, compared to growth of 3.8% in 2019 at constant 2018 market prices. The largest contributor to the contraction in 2020 was the effect of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers. This resulted in a 2.7% contraction in the manufacture of food products in 2020 as compared to growth of 3.7% in 2019, a 1.8% contraction in manufacture of chemical and chemical products in 2020 as compared to a growth of 13.3% in 2019, and a 48.1% contraction in manufacture of coke and refined petroleum products in 2020 as compared to a lower contraction of 16.2% in 2019, each at constant 2018 market prices.

Service Sector

The service sector includes the wholesale and retail trade and repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities; information and communication; financial and insurance activities; real estate and ownership of dwellings; professional and business services; public administration and defense; compulsory social activities; education; human health and social work activities; and other services subsectors. The service sector remains the largest contributor to GDP, having contributed 60.7% to GDP at constant 2018 market prices in 2020, an increase from 59.3% in 2015.

The service sector contracted by 9.2% in 2020, compared to 6.8% growth recorded in 2019 at constant 2018 market prices. The main contributor to the contraction in the 2020 was the effect of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers. This resulted in a 6.0% contraction in the wholesale and retail trade and repair of motor vehicles and motorcycles subsector as compared to 7.2% growth in 2019; a 30.9% contraction in the transportation and storage subsector as compared to 6.0% growth in 2019; and a 17.0% contraction in the real estate and ownership of dwellings subsector as compared to 3.9% growth in 2019, in each case, at constant 2018 market prices.

Net Primary Income

Net primary income is a component of GNI but is not included in GDP. Net primary income is a significant factor in the Philippine economy, largely driven by OFW remittances. Net primary income includes estimates of the amount of compensation of OFWs, as well as investment income of OFWs from their properties. According to the latest figures from the PSA for years 2016, 2017, 2018, 2019 and 2020, net primary income accounted for 10.1%, 10.0%, 9.6%, 9.0% and 7.1% of GNI, respectively, at constant 2018 market prices.

In 2020, net primary income contracted by 30.1%, compared to a 1.6% contraction in 2019, based on constant 2018 market prices. This higher contraction was primarily due to a 29.3% decrease in inflows arising from compensation in 2020 from growth of 2.4% in 2019. This was partially offset a 38.3% decrease in outflows arising from compensation in 2020 from growth of 100.3% in 2019.

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Prices, Employment and Wages

Inflation

The following table sets out the CPI and inflation rate (based on the 2012 CPI basket) and the manufacturing sector’s equivalent, the producer price index (“PPI”) (based on the 2000 PPI basket), as well as the annual percentage changes in each index.

Changes in Consumer and Producer Price Index


	Changes in Consumer and Producer Price Index
	2016			2017			2018			2019			2020			2021⁽¹⁾
Consumer price index (2012 CPI basket)		108.4			111.5			117.3			120.2			123.3			128.1
Inflation rate (2012 CPI basket)		1.3	%		2.9	%		5.2	%		2.5	%		2.6	%		4.5	%
Producer price index for manufacturing (2000 PPI basket)		134.1			132.9			133.8			136.0			129.8			N/A
Inflation rate (2000 PPI basket)		(4.8	)%		(0.9	)%		0.7	%		1.6	%		(4.3	)%		N/A

Source: Bangko Sentral; Philippine Statistics Authority.

Notes:

(1)	Based on preliminary data for the two months ended February 28, 2021.

Consumer Price Index

The average inflation rate for 2020 was 2.6%, higher than the average inflation rate of 2.5% in 2019. The higher rate of inflation in 2020 was due mainly to higher growth in the price indices of food and non-alcoholic beverages at 2.7% in 2020 as compared to 2.1% in 2019. This effect was partially offset by lower growth in the price indices of housing, water, electricity, gas, and other fuels at 0.9% in 2020 and restaurants and miscellaneous goods and services at 2.4% in 2020 as compared to 2.4% and 3.4%, respectively, in 2019.

In the first two months of 2021, the average inflation rate was 4.5%, higher than the average inflation rate of 2.8% in the first two months of 2020. The higher rate of inflation in the first two months of 2021 was due mainly to higher growth in the price indices of food and non-alcoholic beverages at 6.4% in the first two months of 2021 as compared to 2.1% in the first two months of 2020. This effect was partially offset by lower growth in the price indices of housing, water, electricity, gas, and other fuels at 0.7% in the first two months of 2021 as compared to 2.1% in the first two months of 2020.

Producer Price Index

In 2020, the producer price index recorded average deflation of 4.0%, compared to average inflation of 1.6% recorded in 2019, based on the 2000 PPI basket. This was primarily due to a decrease in the producer price index for paper and paper products from an average inflation of less than 0.1% in 2019 to an average deflation of 9.6%, respectively, in 2020, based on the 2000 PPI basket. The producer price indices for most other major industry groups likewise decreased during this period.

In January 2021, the 2018 PPI basket was released. The Government stopped reporting inflation figures based on the 2000 PPI basket in January 2021.

The PPI index as of February 28, 2021 was 91.2 as compared to 96.2 as of February 28, 2020 and 92.7 as of December 31, 2020, based on the 2018 PPI basket.

In the first two months of 2021, the producer price index recorded average deflation of 5.3%, higher than the average deflation rate of 3.3% in the first two months of 2020, based on the 2018 PPI basket. The higher rate of inflation in the first two months of 2021 was due mainly to a 26.8% decrease in the producer price index of

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manufacture of coke and refined petroleum products in the first two months of 2021 as compared to a 6.4% increase in the first two months of 2020. The producer price indices for most other major industry groups likewise decreased during this period.

Employment and Wages

The following table presents selected employment estimates for various sectors of the economy.


	Selected Employment Information
	2016		2017		2018⁽¹⁾		2019⁽²⁾		2020⁽³⁾		2021⁽⁴⁾
	*(all figures in percentages except as indicated)*
Employed persons (in thousands)⁽⁵⁾		40,998		40,334		41,157		42,537		39,836		43,153
Unemployment rate (%)		5.5		5.7		5.3		4.6		8.6		8.8
Employment share by sector:
Agriculture, hunting, forestry and fishing sector		26.9		25.4		24.3		22.8		24.5		23.9
Industry sector
Mining and quarrying		0.5		0.5		0.5		0.4		0.4		0.3
Manufacturing		8.3		8.6		8.8		8.5		7.6		7.6
Construction		8.3		8.8		9.4		9.8		10.0		9.5
Water supply, sewerage, waste management and remediation activities		0.2		0.2		0.1		0.1		0.2		0.2
Electricity, gas, steam and air conditioning supply		0.2		0.2		0.2		0.2		0.2		0.1

Total industry sector		17.5		18.3		19.1		19.1		18.3		17.7
Service sector
Transport and storage		7.4		7.8		7.8		8.2		7.1		7.15
Wholesale and retail trade; repair of motor vehicles and motorcycles		19.6		19.6		19.4		19.9		21.0		22.3
Finance and housing⁽⁶⁾		7.1		7.7		8.0		8.5		8.0		7.9
Other services⁽⁷⁾		21.5		21.3		21.4		21.5		27.1		20.9

Total service sector		55.6		56.3		56.6		58.1		57.2		58.4

Total employed		100.0		100.0		100.0		100.0		100.0		100.0

Sources: Philippine Statistics Authority; Annual Labor and Employment Status; Labor Force Survey.

Notes:

(1)	Annual estimates were based on the final results of the 2018 Labor Force Survey.

(2)	Annual estimates were based on the final results of the 2019 Labor Force Survey.

(3)	Preliminary results of as of October 2020 based on the 2020 Annual Estimates of Labor Force Survey October rounds.

(4)	Preliminary results as of February 2021 based on the 2021 Annual Estimates of Labor Force Survey February rounds.

(5)	Does not include OFWs.

(6)	Sum of financial and insurance activities, real estate activities and public administration and defense; compulsory social security subsectors.

(7)	Sum of all other service sectors excluding transport and storage, wholesale and retail trade; repair of motor vehicles and motorcycles, finance and housing.

In October 2020, the total number of employed persons in the Republic, excluding OFWs, was estimated at 39.8 million. The unemployment rate was 8.6% in October 2020, higher than the 4.6% recorded in October 2019. The labor force participation rate was 58.7% in October 2020, lower than the 61.4% recorded in October 2019. In October 2020, workers in the Republic were primarily employed in the service sector, representing 57.2% of the

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total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles comprised 21.0% of the total employed. Workers in the agriculture, hunting, forestry and fishing sector and the industry sector comprised 24.5% and 18.3% of the total employed in October 2020, compared to 22.8% and 19.1% in October 2019, respectively.

In February 2021, the total number of employed persons in the Republic, excluding OFWs, was estimated at 43.2 million. The unemployment rate was 8.8% in February 2021, higher than the 5.3% recorded in January 2020. The labor force participation rate was 63.5% in February 2021, lower than the 61.7% recorded in January 2020. In February 2021, workers in the Republic were primarily employed in the service sector, representing 58.4% of the total employed population in the Republic, of which workers in the wholesale and retail trade and repair of motor vehicles and motorcycles comprised 22.3% of the total employed. Workers in the agriculture, hunting, forestry and fishing sector and the industry sector comprised 23.9% and 17.7% of the total employed in February 2021, compared to 22.6% and 18.8% in January 2020, respectively.

The following table presents employment information in the Republic by age group:


	Percentage Distribution of Household Population 15 Years Old and over by Employment Status, by Age Group
	October 2019		October 2020⁽¹⁾		February 2021⁽²⁾
Age Group	Unemployed		Unemployed		Unemployed
	*(all figures in percentages except as indicated)*
15 – 24		45.9		34.7		33.4
25 – 34		33.0		32.8		32.6
35 – 44		10.1				15.7
45 – 54		6.4		10.1		9.8
55 – 64		3.6		5.2		6.7
65 and over		0.9		1.1		1.8

Total for all ages		100.0		100.0		100.0

Source: Philippine Statistics Authority; October 2019, October 2020 and February 2021 Labor Force Survey.

Notes:

(1)	Preliminary data for the ten months ended October 31, 2020.

(2)	Preliminary data for the two months ended February 28, 2021.

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Balance of Payments

The following table sets out balance of payments of the Republic for the periods indicated.


	Balance of Payments
	2018			2017			2018			2019			2020⁽¹⁾
	*($ in millions)*
Current account⁽²⁾		(1,199	)		(2,143	)		(8,877	)		(3,047	)		12,979
Exports		108,905			124,126			129,980			136,889			118,656
Imports		110,104			126,269			138,857			139,936			105,678
Goods, Services, and Primary Income		(25,926	)		(28,295	)		(35,695	)		(30,996	)		(14,403	)
Total exports		83,494			97,229			102,373			108,143			90,416
Total imports		109,420			125,525			138,068			139,139			104,819
Goods and Services		(28,506	)		(31,522	)		(39,364	)		(36,364	)		(18,759	)
Exports		73,938			86,646			90,374			94,741			78,882
Imports		102,444			118,168			129,738			131,013			97,581
Goods		(35,549	)		(40,215	)		(50,972	)		(49,312	)		(31,839	)
Exports		42,734			51,814			51,977			53,477			47,411
Imports		78,283			92,029			102,949			102,788			79,250
Services		7,043			8,693			11,608			13,039			13,080
Exports		31,204			34,832			38,397			41,264			31,410
Imports		24,160			26,139			26,789			28,225			18,331
Primary Income		2,579			3,226			3,669			5,276			4,356
Receipts		9,556			10,583			11,999			13,402			11,594
Payments		6,977			7,357			8,330			8,125			7,238
Secondary Income		24,728			26,153			26,818			27,949			27,381
Receipts		25,411			26,897			27,607			28,746			28,240
Payments		684			745			788			797			859
Capital account⁽²⁾		62			69			65			127			63
Receipts		77			103			103			147			88
Payments		15			34			38			20			25
Financial account⁽³⁾		175			2,798			(9,332	)		(8,034	)		4,608
Net acquisition of financial assets⁽⁴⁾		5,658			6,717			7,522			7,297			12,319
Net incurrence of liabilities⁽⁴⁾		5,483			9,515			16,855			15,331			16,928
Direct investment		(5,883	)		(6,952	)		(5,833	)		(5,320	)		(3,017	)
Net acquisition of financial assets⁽⁴⁾		2,397			3,305			4,116			3,351			3,525
Net incurrence of liabilities⁽⁴⁾		8,280			10,256			9,949			8,671			6,542
Portfolio investment		1,480			2,454			1,448			(2,474	)		502
Net acquisition of financial assets⁽⁴⁾		1,216			1,658			4,740			2,402			5,787
Net incurrence of liabilities⁽⁴⁾		(264	)		(796	)		3,292			4,876			5,285
Financial derivatives		(32	)		(51	)		(53	)		(173	)		(239	)
Net acquisition of financial assets⁽⁴⁾		(701	)		(503	)		(679	)		(874	)		(840	)
Net incurrence of liabilities⁽⁴⁾		(669	)		(453	)		(626	)		(701	)		(602	)
Other investment		4,610			1,750			(4,894	)		(67	)		1,855
Net acquisition of financial assets⁽⁴⁾		2,746			2,257			(654	)		2,417			3,847
Net incurrence of liabilities⁽⁴⁾		(1,864	)		508			4,240			2,484			5,702
Net unclassified items⁽⁵⁾		274			(1,588	)		(2,826	)		2,729			(1,629	)

Overall balance of payments position⁽⁶⁾		(1,038	)		(863	)		(2,306	)		7,843			16,022

Source: Department of Economic Statistics, Bangko Sentral.

Notes:

(1)	Preliminary data.

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(2)	Balances in the current and capital accounts are derived by deducting debit entries from credit entries.

(3)	Balances in the financial account are derived by deducting net incurrence of liabilities from net acquisition of financial assets.

(4)	Negative values of Net Acquisition of Financial Assets indicate withdrawal/disposal of financial assets; negative values of Net Incurrence of Liabilities indicate repayment of liabilities.

(5)	Net unclassified items is an offsetting account to the overstatement or understatement in either receipts or payments of the recorded balance of payments components relative to the overall balance of payments position.

(6)

The overall balance of payments position is calculated as the change in the country’s net international reserves, less non-economic transactions (revaluation and gold monetization/demonetization). Alternatively, it can be derived by adding the current and capital account balances less financial account plus net unclassified items.

Overall Balance of Payments Performance

In 2020, according to preliminary data, the overall balance of payments position of the Republic recorded a surplus of $16.0 billion compared to the $7.8 billion surplus recorded in 2019. The change was primarily the result of a net inflow in the current account, which recorded a surplus of $13.0 billion in 2020, as compared to a deficit of $3.0 billion in 2019. This was partially offset by a lower net outflow in the financial account, which recorded net outflows of $4.6 billion in 2020, as compared to net outflows of $8.0 billion in 2019.

Current Account

In 2020, according to preliminary data, the current account recorded a surplus of $13.0 billion, compared to a deficit of $3.0 billion recorded in 2019. This surplus was primarily due to a 35.4% decrease in trade-in-goods deficit from $49.3 billion in 2019 to $31.8 billion in 2020. This effect was partially offset by 17.4% and 2.0% decreases in surplus in primary income and secondary income to $4.3 billion and $27.9 billion in 2020, respectively, compared to $5.3 billion and $28.0 billion in 2019, respectively.

Goods Trade

In 2020, according to preliminary data, the trade-in-goods deficit decreased by 35.4% to $31.8 billion, compared to a deficit of $49.3 billion recorded in 2019. The decrease in trade-in-goods deficit was primarily the result of a decrease in imports, which decreased by 22.9% in 2020 to $79.3 billion, compared to $102.8 billion recorded in 2019. In addition, exports of goods decreased by 11.3% to $47.4 billion in 2020, compared to $53.5 billion in 2019. Both decreases in exports as well as imports of goods were due mainly to the effect of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers.

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Exports of Goods

The following table sets out the Republic’s exports of goods by major commodity group, as reported by the PSA.


	Exports by Major Commodity Groups
	Annual										Growth Rates						Percentage of Total Exports
Commodities	2016		2017		2018		2019		2020⁽¹⁾		2019			2020⁽¹⁾			2016		2020⁽¹⁾
											*(%)*						*(%)*
	*($ in millions, except percentages)*
Agricultural products
Coconut products		1,437		2,051		1,539		1,294		1,176		(15.9	)		(9.1	)		2.5		1.8
Sugar and products		105		217		76		67		66		(11.7	)		(1.6	)		0.2		0.1
Fruits and vegetables		1,581		1,850		1,980		2,854		2,565		44.1			(10.1	)		2.8		4.0
Other agro-based products		864		1,013		990		952		849		(3.8	)		(10.8	)		1.5		1.3

Total agricultural based products		3,987		5,131		4,585		5,167		4,656		12.7			(31.6	)		6.9		7.2

Forest products		28		184		257		358		310		39.1			(13.4	)		0.0		0.5
Mineral products		2,350		4,285		4,045		4,664		4,981		15.3			6.8			4.1		7.8
Petroleum products		282		396		494		226		187		(54.3	)		(17.0	)		0.5		0.3
Manufacturing																		0.0
Electronic products		29,418		36,536		38,327		40,022		36,984		4.4			(7.6	)		51.2		57.9
Other electronics		2,825		3,197		3,302		3,469		2,685		5.0			(22.6	)		4.9		4.2
Garments		1,099		1,099		974		928		643		(4.8	)		(30.7	)		1.9		1.0
Textile yarns/fabrics		189		235		215		217		308		1.0			42.2			0.3		0.5
Footwear		49		80		103		132		113		28.1			(14.7	)		0.1		0.2
Travel goods and handbags		472		485		597		745		418		24.6			(43.8			0.8		1.1
Wood manufacturing		2,714		1,204		320		251		170		(21.6	)		(32.3	)		4.7		0.7
Furniture and fixtures		265		337		353		299		329		(15.4	)		10.1			0.5		0.5
Chemicals		1,722		1,786		1,572		1,508		1,300		(4.1	)		(13.8	)		3.0		2.0
Non-metallic mineral manufacturing		151		202		236		267		225		13.3			(15.9	)		0.3		0.4
Machinery and transport equipment		4,276		5,093		4,813		4,128		2,205		(14.2	)		(46.6	)		7.4		3.5
Processed food and beverages		1,076		1,395		1,333		1,330		1,218		0.2			(8.4	)		1.9		1.9
Iron and steel		122		131		124		93		35		(24.8	)		(62.3	)		0.2		0.1
Baby carriages, toys, games and sporting goods		235		214		222		269		228		20.8			(15.1	)		0.4		0.4
Basketwork, wicker-work, and other articles of plaiting materials		48		43		35		31		44		(13.1	)		44.3			0.1		0.1
Miscellaneous		746		729		1,042		963		775		(7.6	)		(19.7	)		1.3		1.2
Others		4,296		4,571		4,639		4,227		4,937		(8.9	)		16.8			7.5		7.7

Total Manufacturing		49,702		57,336		58,207		58,876		52,615		1.1			(10.6	)		86.6		82.4
Special transactions		1,057		1,382		1,720		1,637		1,130		(4.8	)		(31.0	)		1.8		1.8

Total exports		57,406		68,713		69,307		70,927		63,879		2.3			(9.9	)		100.0		100

Source: Philippine Statistics Authority, Bangko Sentral.

Note:

(1)	Preliminary data.

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The following table sets out the Republic’s exports of goods by destination, as reported by the PSA.


	Exports of Goods by Destination										Percentage of Total Exports
Country	2016		2017		2018		2019		2020⁽¹⁾		2016		2020⁽¹⁾
											*(%)*
	*($ in millions, except percentages)*
United States		8,851		9,661		10,636		11,567		9,716		15.4		15.2
European Union⁽²⁾		6,970		9,607		8,908		8,285		6,847		12.1		10.7
Japan		11,670		10,853		10,323		10,675		9,924		20.3		15.5
People’s Republic of China		6,373		8,017		8,817		9,814		9,622		11.1		15.1
Hong Kong		6,617		9,024		9,564		9,625		9,086		11.5		14.2
South Korea		2,182		4,334		2,608		3,241		2,536		3.8		4.0
Singapore		3,824		3,973		4,316		3,832		3,758		6.7		5.9
Taiwan		2,127		2,451		2,521		2,253		2,057		3.7		3.2
Southeast Asia⁽³⁾		4,806		6,122		6,832		6,958		6,418		8.4		10.0
Others		3,986		4,671		4,782		4,677		3,915		6.9		6.1

Total		57,406		68,713		69,307		70,927		63,879		100.0		100.0

Source: Philippine Statistics Authority, Bangko Sentral.

Notes:

(1)	Preliminary data.

(2)

Includes Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Federal Republic of Germany, Finland, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Romania and the United Kingdom.

(3)	Includes only Malaysia, Indonesia, Thailand, Brunei Darussalam, Vietnam, Myanmar and Laos.

In 2020, according to preliminary PSA data, total exports of goods decreased by 9.9% to $63.9 billion, from the $70.9 billion recorded in 2019. This was primarily a result of the effect of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers. As a result, exports of manufactured goods, which comprised 82.4% of total exports, decreased to $52.6 billion in 2020, a decrease of 10.6% over the $58.9 billion recorded in 2019. Exports of agriculture-based products, which comprised 7.2% of total exports, decreased to $4.6 billion in 2020, a decrease of 9.8% from $5.1 billion in 2019. These effects were partially offset by a 6.8% increase in exports of mineral products, which comprised 7.8% of total exports, to $5.0 billion in 2020 from $4.7 billion in 2019.

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Imports of Goods

The following table sets out the sources of the Philippines’ imports of goods by commodity group.


	Imports of Goods by Commodity Group
	Annual										Growth Rates						Percentage of Total Exports
Commodities	2016		2017		2018		2019		2020⁽¹⁾		2019			2020⁽¹⁾			2016		2020⁽¹⁾
											*(%)*						*(%)*
	*($ in millions, except percentages)*
Capital goods		28,746		31,469		35,285		37,434		28,442		6.1			(24.0	)		34.2		33.2
Raw materials and intermediate goods
Unprocessed raw materials		2,727		4,276		4,851		3,576		3,000		(26.3	)		(16.1	)		3.2		3.5
Semi-processed raw materials		29,310		32,662		39,979		37,041		31,210		(7.3	)		(15.7	)		34.8		36.4
Raw materials and intermediate goods		32,038		36,938		44,830		40,617		34,210		(9.4	)		(15.8	)		38.1		40.0

Mineral fuels and lubricants		7,969		10,796		14,041		13,362		7,439		(4.8	)		(44.3	)		9.5		8.7
Consumer goods
Durable		8,374		9,467		9,804		10,176		6,822		3.8			(33.0	)		10.0		8.0
Non-durable		6,448		6,931		8,202		9,084		7,922		10.8			(12.8	)		7.7		9.2

Total consumer goods		14,822		16,398		18,006		19,260		14,744		7.0			(23.4	)		17.6		17.2
Special transactions⁽²⁾		533		493		680		920		852		35.2			(7.4	)		0.6		1.0
Total imports		84,108		96,093		112,841		111,593		85,687		(1.1	)		(23.2	)		100.0		100.0

Source: Philippine Statistics Authority, Bangko Sentral.

Notes:

(1)	Preliminary data.

(2)	Excludes value of goods that do not involve change in ownership such as consigned, returned/replacement and temporarily imported goods.

The following table sets out the sources of the Philippines’ imports of goods by country.


	Imports of Goods by Source										Percentage of Total Exports
Country	2016		2017		2018		2019		2020⁽¹⁾		2016		2020⁽¹⁾
											*(%)*
	*($ in millions, except percentages)*
Japan		9,882		10,912		10,818		10,580		8,154		11.75		9.45
United States		7,576		7,784		8,062		8,072		6,642		9.01		7.8
Southeast Asia⁽²⁾		16,577		19,616		22,250		22,465		17,316		19.71		20.2
People’s Republic of China		15,565		17,464		22,015		25,496		19,874		18.51		23.2
Hong Kong		2,492		2,715		3,046		3,598		2,656		2.96		3.1
Taiwan		5,185		5,090		5,500		4,753		4,568		6.16		5.3
South Korea		5,568		8,465		11,312		8,477		6,682		6.62		7.8
Singapore		5,464		5,599		6,174		6,658		5,388		6.50		6.3
Oceania⁽³⁾		1,571		2,635		2,461		2,213		1,364		1.87		1.6
European Union⁽⁴⁾		6,743		6,644		8,587		9,338		6,217		8.02		7.3
Middle East⁽⁵⁾		3,019		3,800		5,685		3,704		1,830		3.59		2.1
Others		4,466		5,369		6,931		6,239		4,996		5.31		5.8

Total		84,108		96,093		112,841		111,593		85,687		100.00		100.0

Source: Philippine Statistics Authority, Bangko Sentral.

Notes:

(1)	Preliminary data.

(2)	Includes only Malaysia, Indonesia, Thailand, Brunei Darussalam, Vietnam, Myanmar and Laos.

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(3)	Includes Australia, New Zealand and Pacific Island countries including Fiji Island, Papua Territory (New Guinea), Solomon Island, Tonga Island, Vanuatu (New Hebrides) and Western Samoa, and other Oceania countries.

(4)

Includes Austria, Belgium, Bulgaria, Croatia (from 2013 onwards), Cyprus, Czech Republic, Denmark, Estonia, France, Federal Republic of Germany, Finland, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Romania and the United Kingdom.

(5)	Includes Iran, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates and other Middle Eastern countries.

In 2020, according to preliminary PSA data, total imports of goods decreased by 23.2% to $85.7 billion, from the $111.6 billion recorded in 2019. This decrease was primarily due to the effects of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers, which led to decreases in imports of capital goods, raw materials and intermediate goods, mineral fuels and lubricants, and consumer goods by 24.0%, 15.8%, 44.3% and 23.5% to $28.4 billion, $34.2 billion, $7.4 billion and $14.7 billion in 2020, respectively, from $37.4 billion, $40.6 billion, $13.4 billion and $19.3 billion in 2019, respectively.

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Services Trade

The following table sets out the Republic’s services trade by sector for the periods indicated.


	Services Trade
	2016			2017			2018			2019			2020
	*($ millions)*
Total services trade		7,043			8,693			11,608			13,039			13,080
Exports		31,204			34,832			38,397			41,264			31,410
Imports		24,160			26,139			26,789			28,225			18,331
Maintenance and repair services		(29	)		(51	)		(54	)		(61	)		(28	)
Exports		83			80			83			110			65
Imports		112			132			136			171			93
Transportation		(2,441	)		(2,533	)		(2,653	)		(2,280	)		(2,351	)

Exports		1,897			2,485			2,703			2,883			1,678
Imports		4,338			5,018			5,356			5,164			4,030
of which: Passenger		600			768			865			787			456
Exports		1,146			1,361			1,475			1,674			759
Imports		546			592			611			887			304
of which: Freight		(2,767	)		(3,188	)		(3,434	)		(3,046	)		(2,937	)
Exports		427			687			764			763			547
Imports		3,195			3,875			4,197			3,809			3,484
of which: Other		(274			(113			(84			(282			129
Exports		323			438			464			446			372
Imports		598			550			548			468			242
Travel		(5,992	)		(4,861	)		(3,623	)		(2,257	)		(2,558	)

Exports		5,143			6,988			8,240			9,781			2,010
Imports		11,135			11,850			11,863			12,038			4,568
Construction services		11			(6	)		(12	)		(5	)		(11	)

Exports		71			57			61			66			85
Imports		60			63			73			71			97
Insurance and pension services		(1,269	)		(1,417	)		(1,379	)		(1,554	)		(1,234	)

Exports		77			85			86			90			75
Imports		1,345			1,502			1,465			1,644			1,309
Financial services		(164	)		(268	)		(287	)		(539	)		(351	)

Exports		394			237			279			234			87
Imports		559			506			566			772			438
Charges for the use of intellectual property		(537	)		(734	)		(873	)		(805	)		(504	)

Exports		9			17			44			28			15
Imports		546			751			917			833			519
Telecommunications, computer, and information services		4,822			4,787			4,949			4,766			4,050
Exports		5,493			5,638			5,940			6,098			5,568
Imports		671			852			991			1,332			1,518
Other business services		10,214			10,596			12,025			11,981			12,604

Exports		15,125			15,580			16,653			17,456			17,625
Imports		4,911			4,984			4,628			5,475			5,020
Personal, cultural and recreational services		43			3			(125	)		(26	)		(18	)

Exports		169			191			149			161			136
Imports		126			188			274			187			154
Government services		(339	)		(275	)		(499	)		(520	)		(565	)

Exports		17			19			19			19			19
Imports		357			294			518			539			584

Source: Bangko Sentral. All data are preliminary.

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In 2020, the trade-in-services account recorded a surplus of $13.1 billion, a 0.3% increase from the $13.0 billion surplus recorded in 2019. The higher surplus was mainly attributable to a 5.2% increase in the surplus of other business and services from $12.0 billion in 2019 to $12.6 billion in 2020; a 20.6% decrease in the deficit of insurance and pension services from $1.6 billion in 2019 to $1.2 billion in 2020; and a 37.4% decrease in the deficit of insurance and pension services from $805 million billion in 2019 to $504 million in 2020. These effects were partially offset by a 15.0% decrease in the surplus of telecommunications, computer, and information services from $4.8 billion in 2019 to $4.1 billion in 2020.

Primary Income

The following table sets out the Republic’s primary income for the periods indicated.


	Primary income
	2016			2017			2018			2019			2020⁽¹⁾
	*($ in millions)*
Total Primary Income		2,579			3,226			3,669			5,276			4,356

Credit		9,556			10,583			11,999			13,402			11,594
Debit		6,977			7,357			8,330			8,125			7,238
Compensation of employees		7,386			7,769			8,130			8,685			8,443

Credit		7,518			7,926			8,288			8,827			8,579
Debit		131			157			158			142			136
Investment income		(4,807	)		(4,542	)		(4,461	)		(3,409	)		(4,087	)

Credit		2,038			2,658			3,711			4,575			3,015
Debit		6,846			7,200			8,172			7,984			7,102
Direct investment income		(2,929	)		(3,067	)		(3,619	)		(2,740	)		(2,985	)
Credit		782			960			1,471			2,033			1,181
Debit		3,711			4,027			5,090			4,773			4,165
Income on equity and investment fund shares		(3,353	)		(3,490	)		(3,994	)		(3,410	)		(3,547	)
Credit		133			240			379			565			326
Debit		3,486			3,730			4,373			3,975			3,872
Dividends and withdrawals from income of quasi-corporations		(2,627	)		(2,756	)		(3,170	)		(2,379	)		(2,682	)
Credit		149			111			306			464			212
Debit		2,776			2,867			3,476			2,843			2,894
Reinvested earnings		(726	)		(734	)		(824	)		(1,031	)		(865	)
Credit		(16	)		129			73			101			113
Debit		710			863			897			1,132			978
Income on debt (interest)		424			423			375			670			562
Credit		649			720			1,092			1,468			855
Debit		224			297			717			798			293
Portfolio investment income		(2,458	)		(2,210	)		(2,041	)		(2,004	)		(1,895	)
Credit		188			394			427			377			456
Debit		2,646			2,604			2,469			2,380			2,351
Income on equity and investment fund shares		(910	)		(1,092	)		(1,003	)		(985	)		(825	)
Credit		0			2			11			1			10
Debit		910			1,094			1,014			986			835
Dividends on equity excluding investment fund shares		(910	)		(1,092	)		(1,003	)		(985	)		(496	)
Credit		0			2			11			1			10
Debit		910			1,094			1,014			986			835
Interest		(1,548	)		(1,119	)		(1,038	)		(1,019	)		(1070	)
Credit		188			391			416			375			446
Debit		1,737			1,510			1,455			1,394			1516
Short term (Money market instruments)		(157	)		(44	)		(12	)		(5	)		(84	)
Credit		14			18			9			8			118
Debit		170			62			21			12			202

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	Primary income
	2016			2017			2018			2019			2020⁽¹⁾
	*($ in millions)*
Long term (Bonds and notes)		(1,392	)		(1,075	)		(1,026	)		(1,014	)		(986	)
Credit		175			373			408			367			328
Debit		1,566			1,447			1,434			1,381			1,313
Central Banks		(19	)		(18	)		(18	)		(13	)		(12	)
Deposit-taking corporation, except the central bank		(64	)		(49	)		(65	)		(143	)		(122	)
General government		(1,135	)		(1,080	)		(1,128	)		(1,100	)		(1073	)
Other sectors		(174	)		72			185			242			221
Credit		175			373			408			367			328
Debit		348			301			223			125			107
Other investment income		(211	)		(214	)		(15	)		(192	)		(314	)
Receipts		277			355			598			639			272
Payments		488			569			613			831			585
Central banks		0			(5	)		(10	)		(12	)		(3	)
Credit		0			0			0			0			0
Debit		0			5			10			12			3
Deposit-taking corporations, except the central bank		121			160			283			275			115
Credit		186			230			379			420			203
Debit		65			70			96			145			88
General government		(242	)		(281	)		(347	)		(467	)		(359	)
Other sectors		(90			(88			59			12			(67	)
Credit		91			125			219			219			68
Debit		181			213			160			207			136

Source: Bangko Sentral.

Note:

(1)	Preliminary data.

In 2020, according to preliminary data, the primary income account recorded a surplus of $4.4 billion, a 17.4% decrease from the $5.3 billion surplus recorded in 2019. The lower surplus was primarily the result of the effects of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers, which led to a 2.9% decrease in the compensation of employees account surplus to $8.4 billion in the 2020 from $8.7 billion in the 2019, and 19.9%, 8.9% and 1.4% respective increases in the deficit in investment income, direct investment and income on equity and investment fund shares to deficits of $4.1 billion, $3.0 billion and $3.6 billion, respectively, in 2020 from deficits of $3.4 billion, $2.7 billion and $3.4 billion in 2019. These effects were partially offset by a 5.4% decrease in deficit of portfolio investment to a deficit of $1.9 billion in 2020, compared to a deficit of $2.0 billion in 2019.

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Secondary Income

The following table sets out the Republic’s secondary income for the periods indicated.


	Secondary Income
	2016		2017		2018		2019		2020⁽¹⁾
	*($ in millions)*
Total Secondary Income		24,728		26,153		26,818		27,949		27,381
Credit		25,411		26,897		27,607		28,746		28,240
Debit		684		745		788		797		859
General Government		560		569		554		846		631
Receipts		618		636		583		883		671
Payments		58		67		29		37		39
Financial corporations, nonfinancial corporations, households and non-profit institutions serving households		24,167		25,584		26,264		27,103		26,750
Credit		24,793		26,261		27,024		27,863		27,569
Debit		626		677		759		760		819
Personal transfers		23,559		24,795		25,421		26,256		26,259
Credit		23,624		24,884		25,521		26,341		26,334
Debit		65		89		100		84		75
Other transfers		608		789		844		846		491
Credit		1,169		1,377		1,502		1,523		1,236
Debit		561		588		659		676		744

Source: Bangko Sentral.

Note:

(1)	Preliminary data.

In 2020, according to preliminary data, the secondary income account recorded a surplus of $27.4billion, 2.0% lower than the $28.0 billion surplus recorded in 2019. The decreased surplus was due mainly to 1.3% and 42.0% respective decreases in the financial corporations, non-financial corporations, households and non-profit institutions serving households account surplus and the other transfers surplus to $26.8 billion and $491 million, respectively, in 2020 from $27.1 billion and $846 million, respectively, in 2019.

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Financial Account

The following table sets out the Republic’s direct investments for the periods indicated.


	Direct Investments
	2016			2017			2018			2019			2020⁽¹⁾
	*($ in millions)*
Total direct investment		(5,883	)		(6,952	)		(5,833	)		(5,320	)		(3,017	)

Net acquisition of financial assets		2,397			3,305			4,116			3,351			3,525

Direct investor in direct investment enterprises		737			1,758			1,029			926			125
Placements		848			2,027			1,123			1,103			248
Withdrawals		112			270			94			178			123
Reinvestment of earnings		(16	)		129			73			101			113
Debt instruments		1,676			1,419			3,014			2,325			3,287
Claims on affiliated enterprises		332			6			7			418			22
Liabilities to affiliated enterprises		1,344			1,413			3,007			1,907			3,265
Net incurrence of liabilities		8,280			10,256			9,949			8671			6,542

Equity capital		3,302			4,261			3,242			2,295			1,476
Direct investor in direct investment		2,592			3,398			2,346			2295			1,476
Placements		3,185			3,885			2,935			3002			1868
Withdrawals		593			487			590			706			392
Reinvestment of earnings		710			863			897			1,132			978
Debt Instruments		4,977			5,996			6,706			5,244			4,089
Claims on direct investors		4,956			5,856			6,367			4,500			3,785
Liabilities to direct investors		21			140			339			744			304

Source: Bangko Sentral.

Note:

(1)	Preliminary data.

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The following table sets out the Republic’s portfolio investments for the periods indicated.


	Portfolio Investments
	2016			2017			2018			2019			2020⁽¹⁾
	*($ in millions)*
Portfolio Investment		1,480			2,454			1,448			(2,474	)		502
Net acquisition of financial assets		1,216			1,658			4,740			2,402			5,787
Equity securities		20			743			85			702			400
Central banks		(6	)		0			0			0			0
Deposit-taking corporations, except the central bank		55			(9	)		(42	)		81			2
Other sectors		(30	)		752			127			622			398
Debt securities		1,196			915			4,655			1,700			5,387
Central bank		0			32			(5	)		95			1,378
Deposit-taking corporations, except the central bank		188			445			3,190			1,983			1,985
Other sectors		1,008			437			1,471			(379	)		2,024
Net incurrence of liabilities		(264	)		(796	)		3,292			4,876			5,285
Equity securities		131			496			(1,031	)		1,764			(2,541	)
Deposit-taking corporations, except the central bank		(236	)		0			(487	)		(99	)		(739	)
Other sectors		367			495			(544	)		3,379			2,862
Debt securities		(395	)		(1,292	)		4,324			3,112			7,826
Central bank		—			(15	)		1			(6	)		(24	)
Deposit-taking corporations, except the central bank		254			214			1,491			1,304			(424	)
General government		(58	)		(299	)		3,111			600			6,094
Other sectors		(590	)		(1,192	)		(280	)		1,214			1,333

Source: Bangko Sentral.

Note:

(1)	Preliminary data.

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The following table sets out the Republic’s other investments for the periods indicated.


	Other Investments
	2016			2017			2018			2019			2020⁽¹⁾
	*($ in millions)*
Total other investment		4,610			1,750			(4,894	)		(67	)		(1,855	)

Net acquisition of financial assets		2,746			2,257			(654	)		2,417			3,847

Currency and deposits		1,014			1,542			(1,430	)		1,019			2,567
Deposit-taking corporations, except the central bank		854			517			(891	)		787			1,240
Other sectors		160			1,025			(539	)		232			1,328
Loans		1,468			629			425			1,210			1,174
Deposit-taking corporations, except the central bank		1,468			629			425			1,210			1,174

Trade credits and advances⁽²⁾		215			90			344			188			118
Other accounts receivable		49			(4	)		7			0			(12	)
Net incurrence of liabilities		(1,864	)		508			4,240			2,484			5,702

Currency and deposits		262			654			121			169			(333	)
Loans		(2,136	)		(676	)		3,560			2,111			6,447
Deposit-taking corporations, except the central bank		(87	)		37			1,722			267			(3,260	)
Long-term		—			—			—			—			—
Short-term		(87	)		37			1,722			267			(3,260	)
General government		(20	)		223			873			1,463			7,170
Long-term drawings		1,130			1,382			2,065			2,627			8,352
Long-term repayments		1,151			1,158			1,192			1,164			1,182
Other sectors		(2,029	)		(937	)		965			382			2,537
Long-term		(2,109	)		(558	)		687			263			2,100
Drawings		1,233			2,386			3,049			2,219			3,385
Repayments		3,342			2,945			2,363			1,956			1,285
Short-term		80			(378	)		278			118			437

Trade credits and advances		(18	)		476			720			117			(789	)
Other accounts payable		29			55			(162	)		87			378

Source: Bangko Sentral.

Notes:

(1)	Preliminary data.

(2)	All trade credits are short-term credits in non-governmental sectors.

The financial account recorded a net inflow of $4.6 billion in 2020, representing a 42.6% decrease from the net inflow of $8.0 billion recorded in 2019. This decrease was primarily due to a 68% increase in net acquisition of financial assets from $7.3 billion to $12.3 billion. This effect was partially offset by an increase in the outflow of other investments to $1.9 billion in 2020 from a net outflow of $0.1 billion in 2019.

Foreign Direct Investment

In May 2020, the Board of Investments submitted its proposed 2020 Investment Priorities Plan (“2020 IPP”) to President Duterte for approval. The 2020 IPP provides a transition for the implementation of the CREATE tax bill, and integrates investment incentives (including income tax holidays and exemption from tax and duty on imports of capital equipment) for rural development, as well as COVID-19 pandemic-mitigating activities, such as the manufacture of COVID-19 essential goods and personal protective equipment. On November 18, 2020, President Duterte signed Memorandum Order No. 50 approving the 2020 IPP. On February 9, 2021, the Board of Investments issued guidelines to implement the 2020 IPP.

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The following table sets out foreign direct investments in the Philippines by sector.


	Net Foreign Direct Investment by Sector⁽¹⁾
	2016			2017			2018			2019			2020⁽²⁾
	*($ in millions)*
Total equity other than reinvestment of earnings, net		2,592.1			3,397.9			2,345.6			2,295.2			1,475.7
Agriculture, forestry and fishing		0.3			20.0			0.9			0.4			0.0
Mining and quarrying		50.4			8.9			5.0			1.4			0.8
Manufacturing		334.3			1,181.8			1,094.9			303.2			745.4
Electricity, gas, steam and air conditioning supply		(83.1	)		1,388.0			199.2			307.25			(38.25	)
Water supply, sewerage, waste management and remediation activities		0.1			1.3			0.4			5.8			0.1
Construction		8.8			162.4			42.7			66.0			96.4
Wholesale and retail trade and repair of motor vehicles and motorcycles		208.2			83.1			(18.0	)		(180.7	)		83.5
Transportation and storage		7.8			49.5			11.2			104.8			19.3
Accommodation and food service activities		168.2			(38.4	)		6.7			20.6			7.8
Information and communication		(2.6	)		38.3			15.9			357.1			128.1
Financial and insurance activities		1,126.1			141.5			454.2			949.7			111.3
Real estate activities		121.9			247.8			294.2			250.4			187.9
Professional, scientific and technical activities		17.6			66.0			15.0			8.1			25.24
Administrative and support service activities		22.5			(5.6	)		22.1			59.5			90.4
Public administration and defense; compulsory social security		0.0			0.0			0.0			0.0			0.0
Education		0.5			1.4			0.3			1.5			0.8
Human health and social work activities		35.2			23.9			2.0			32.2			14.3
Arts, entertainment and recreation		575.0			27.8			198.4			9.1			2.8
Other service activities		(0.0	)		0.1			0.5			(1.0	)		0.1
Others, not elsewhere classified⁽³⁾		1.0			0.0			0.0			0.0			0.1
Reinvestment of earnings		710.2			862.6			896.6			1,132.0			978.0
Debt instruments		4,977.3			5,995.9			6,706.4			5,244.2			4,088.6

Total		8,279.6			10,256.4			9,948.6			8,671.4			6,542.3

Source: Department of Economic Statistics, Bangko Sentral.

Notes:

(1)

Data restated using the 2009 Philippine Standard Industrial Classification and in accordance with the BPM6 framework. Pursuant to BPM6, net FDI flows refer to non-residents’ net equity capital (calculated as placements less withdrawals plus reinvestment of earnings plus debt instruments (i.e., net intercompany borrowings)).

(2)	Preliminary data.

(3)	Covers non-residents investments in non-banks sourced from the Cross-Border Transactions Survey and in local banks; sectoral or industry breakdown statistics are not available.

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The following table sets out foreign direct investments in the Philippines by country.


	Net Foreign Direct Investment by Country⁽¹⁾
	2016		2017			2018			2019			2020⁽²⁾
	*($ in millions)*
Country
Total equity other than reinvestment of earnings, net		2,592.1		3,397.9			2,345.6			2,295.2			1,475.7
Japan		1,088.4		72.1			85.6			304.7			698.7
North America⁽³⁾		79.1		467.7			177.3			292.8			158.6
European Union		118.1		1,786.7			355.2			359.8			319.7
Other Europe⁽⁴⁾		5.3		14.1			1.1			22.0			3.15
Asia⁽⁵⁾		22.9		110.0			210.4			283.62			63.6
Asia Newly Industrialized Economies (ANIES)⁽⁶⁾		918.2		203.8			490.2			288.2			97.4
ASEAN⁽⁷⁾		269.4		725.5			1,070.2			662.2			98.0
Australia and New Zealand		6.3		(2.8	)		(105.9	)		(1.9	)		(3.8	)
Central and South America⁽⁸⁾		77.9		7.4			37.4			5.6			2.2
Others		6.6		13.4			17.2			77.4			37.2
International organization		0.0		0.0			0.0			0.0			0.0
Reinvestment of earnings⁽⁹⁾		710.2		862.6			896.6			1,132.0			978.0
Debt instruments⁽⁹⁾		4,977.3		5,995.9			6,706.4			5,244.2			4,088.6

Total		8,279.6		10,256.4			9,948.6			8,671.4			6,542.3

Source: Department of Economic Statistics, Bangko Sentral.

Notes:

(1)

Data restated using the 2009 Philippine Standard Industrial Classification and in accordance with the BPM6 framework. Pursuant to BPM6, net FDI flows refers to non-residents’ net equity capital (calculated as placements less withdrawals plus reinvestment of earnings plus debt instruments (i.e. net intercompany borrowings)).

(2)	Preliminary data.

(3)	Includes the United States and Canada.

(4)	Includes Albania, Belarus, Croatia, Gibraltar, Iceland, Liechtenstein, Norway, Romania, Russian Federation, Switzerland and Ukraine.

(5)	Includes China, India, Pakistan and Western, Central, South and East Asia except South Korea, Hong Kong, Taiwan and ASEAN countries.

(6)	Includes South Korea, Hong Kong and Taiwan.

(7)	Includes Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.

(8)	Includes Argentina, Brazil, Mexico, Panama and other Central and South American countries.

(9)	Country breakdowns for debt instruments are not available.

In 2020, according to preliminary data, net inflows of foreign direct investment were $6.5 billion, 24.6% lower than the $8.7 billion recorded in 2019. The lower inflows were mainly due to a decline in net debt instruments from $5.2 billion in 2019 to $4.1 billion in 2020, and a decline in net equity investment other than reinvestment of earnings from $2.3 billion in 2019 to $1.5 billion in 2020. Net investments in manufacturing activities increased from a net inflow of $303.2 million in 2019 to a net inflow of $745.4 million in 2020, while net investments in financial and insurance activities decreased from a net inflow of $949.7 million in 2019 to a net outflow of $111.3 million in 2020.

The contribution of new equity investments to net inflows of foreign direct investment decreased to $1.5 billion in 2020 from $2.3 million in 2019. Foreign direct investment decreased primarily as a result of decreases in new equity investments from Singapore and China to net inflows of $71.1 million and $52.2 million, respectively, in 2020 from a net inflow of $545.1 and $276.4 million, respectively, in 2019. These were partially

S-35

offset by an increase in net inflows from Japan from a net inflow of $304.7 million in 2019 to a net inflow of $698.7 million in 2020. Reinvestment of earnings in the Republic decreased to $978.0 million in 2020, compared with $1.1 billion in 2019.

International Reserves

The following table sets out the gross international reserves of Bangko Sentral, compiled in a manner consistent with the revised balance of payments framework and the treatment of IMF accounts in the depository corporations survey published in the IMF’s International Financial Statistics.


	Gross International Reserves of Bangko Sentral
	As of December 31,
	2016		2017		2018		2019		2020		2021⁽¹⁾
	*($ in millions, except months and percentages)*
Reserve position in the IMF⁽²⁾		442		424		474		590		813.1		794.1
Gold		7,259		8,337		8,154		8,016		11,605.3		9,1143.5
SDRs		1,138		1,211		1,184		1,182		1,232.9		1,232.2
Foreign investments		68,290		65,815		66,733		75,304		93,644.5		89,994.9
Foreign exchange⁽³⁾		3,563		5,783		2,650		2,748		2,821.6		3,685.7

Total		80,692		81,570		79,193		87,840		110,117.4		104,820.4

Total as number of months of imports of goods and services		8.8		7.8		6.9		7.6		10.3		12.0
Total as a % of short-term debt⁽⁴⁾
Original maturity		556		571		493		511		932		749
Residual maturity		418		419		369		402		542		527

Source: Bangko Sentral.

Notes:

(1)	Preliminary data for the three months ended March 31, 2021.

(2)	The reserve position in the IMF refers to the country’s claim on the IMF’s General Resources Account. It is an asset of the Government but is treated as part of the gross international reserves.

(3)	Consists of time deposits, investments in securities issued or guaranteed by Government or international organizations and repurchase agreements.

(4)	Short-term debt based on residual maturity refers to outstanding short-term external debt on original maturity plus principal payments on medium- and long-term loans of the public and private sectors due within the next 12 months.

As of December 31, 2020, gross international reserves were $110.1 billion, an increase from the $87.8 billion recorded as of December 31, 2019. This increase was mainly due to an increase of $18.3 billion in foreign investments to $93.6 billion as of December 31, 2020 from $75.3 billion as of December 31, 2019. The level of gross international reserves as of December 31, 2020 was sufficient to cover approximately 12.6 months of imports of goods and payments of services and income, and was equivalent to 7.8 times the Republic’s short-term debt based on original maturity and 4.8 times based on residual maturity. Net international reserves at the end of December 2020 were $110.1 billion.

According to preliminary data, gross international reserves were $104.8 billion as of March 31, 2021, a decrease from the $110.1 billion recorded as of December 31, 2020. This decrease was mainly due to a decrease of $3.6 billion in foreign investments to $90.0 billion as of March 31, 2021 from $93.6 billion as of December 31, 2020. The level of gross international reserves as of March 31, 2021 was sufficient to cover approximately 12.0 months of imports of goods and payments of services and income, and was equivalent to 7.5 times the Republic’s short-term debt based on original maturity and 5.3 times based on residual maturity. Net international reserves as of March 31, 2021 were $104.8 billion.

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Money Supply

The following table presents certain information regarding the Philippines’ money supply.


	Money Supply (SRF-based)
	As of December 31,
	2016			2017			2018			2019			2020			2021⁽¹⁾
	(₱ *in billions, except percentages)*
M1⁽²⁾
Currency in circulation		921.0			1,047.6			1,231.8			1,395.8			1,732.9			1,617.5
Current account deposits		2,148.5			2,503.3			2,657.2			3,104.5			3,723.7			3,759.5
Total		3,069.5			3,550.8			3,889.0			4,500.3			5,456.5			5,377.0
percentage increase⁽³⁾		15.1	%		15.7	%		9.5	%		15.7	%		21.2	%		(1.5	%)
M2⁽⁴⁾		9,140.4			10,202.3			11,080.2			12,293.2			13,554.3			13,316.2
percentage increase⁽³⁾		13.3	%		11.6	%		8.6	%		10.9	%		10.3	%		(1.76	%)
M3⁽⁵⁾		9,506.0			10,636.1			11,643.0			12,976.3			14,211.5			13,963.4
percentage increase⁽³⁾		12.8	%		11.9	%		9.5	%		11.5	%		12.3	%		(1.75	%)

Source: Department of Economic Statistics, Bangko Sentral.

Notes:

(1)	Preliminary data as of February 28, 2021.

(2)	Consists of currency in circulation and demand deposits.

(3)	Period-on-period.

(4)	Consists of M1, savings deposits and time deposits.

(5)	Consists of M2 and deposit substitutes.

As of December 31, 2020, the Republic’s money supply (M3) was ₱14.2 trillion, an increase of 9.5% from the ₱13.0 trillion as of December 31, 2019. This growth in money supply was driven mainly by the increase in domestic claims, which increased by 4.5% compared to the level as of December 31, 2019. This increase was primarily driven by a increase in claims on Central Government, which increased by 31.1% compared to the level as of December 31, 2019. Bangko Sentral’s net foreign asset position increased by 20.5% to ₱5.3 trillion as of December 31, 2020 and the net foreign asset position of other depository corporations also increased by 72.9% to ₱0.8 trillion as of December 31, 2020.

As of February 28, 2021, according to preliminary data, the Republic’s money supply (M3) was ₱14.0 trillion, a decrease of 1.7% from the ₱14.2 trillion as of December 31, 2020. This contraction in money supply was driven mainly by a decrease in domestic claims, which decreased by 1.2% compared to the level as of December 31, 2020. This decrease was primarily driven by a decrease in claims on sectors other than the Central Government, which decreased by 2.1% compared to the level as of December 31, 2020. Bangko Sentral’s net foreign asset position decreased by 0.3% to ₱5.3 trillion as of February 28, 2021 and the net foreign asset position of other depository corporations increased by 6.8% to ₱0.8 trillion as of February 28, 2021.

In the three months ended March 31, 2021, the average 91 day T-bill rate was 1.0%.

The following table presents information regarding domestic interest and deposit rates.


	Domestic Interest and Deposit Rates
	2016			2017			2018			2019			2020			2021
	*(weighted averages per period)*
91-day Treasury bill rates		1.5	%		2.1	%		3.5	%		4.7	%		2.0	%		1.0	%⁽¹⁾
Bank average lending rates		5.6	%		5.6	%		6.1	%		7.1	%		NA			NA

Source: Bangko Sentral.

Note:

(1)	Based on preliminary data for the three months ended March 31, 2021.

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Monetary Regulation

On October 1, 2020, the Monetary Board decided to maintain to interest rate on the Bangko Sentral’s overnight reverse repurchase facility at 2.25%. The interest rates on the overnight deposit and lending facilities were likewise kept at 1.75% and 2.75%, respectively. On November 19, 2020, the Monetary Board decided to cut the interest rate on the Bangko Sentral’s overnight reverse repurchase facility by 25 basis points to 2.0%. The interest rates on the overnight deposit and lending facilities were likewise reduced to 1.5% and 2.5%, respectively. On December 17, 2020, the Monetary Board decided to maintain the interest rate on the Bangko Sentral’s overnight reverse repurchase facility at 2.0%. The interest rates on the overnight deposit and lending facilities were likewise kept at 1.5% and 2.5%, respectively.

On February 11, 2021, the Monetary Board decided to maintain the interest rate on the Bangko Sentral’s overnight reverse repurchase facility at 2.0%. The interest rates on the overnight deposit and lending facilities were likewise kept at 1.5% and 2.5%, respectively. On March 24, 2021, the Monetary Board decided to maintain the interest rate on the Bangko Sentral’s overnight reverse repurchase facility at 2.0%. The interest rates on the overnight deposit and lending facilities were likewise kept at 1.5% and 2.5%, respectively.

Foreign Exchange System

The Republic maintains a floating exchange rate system under which market forces determine the exchange rate for the peso. Bangko Sentral may, however, intervene in the market to maintain orderly market conditions and limit sharp fluctuations in the exchange rate.

The following table sets out exchange rate information between the peso and the U.S. dollar.


	Exchange Rates of Peso per U.S. Dollar
Year	Period End		Period Average⁽¹⁾
2016		49.813		47.493
2017		49.923		50.403
2018		52.724		52.661
2019		50.744		51.796
2020		48.036		49.624
2021⁽²⁾		48.466		48.280

Source: Reference Exchange Rate Bulletin, Treasury Department, Bangko Sentral.

Notes:

(1)	The average of the monthly average exchange rates for each month of the applicable period.

(2)	Preliminary data as of March 31, 2021.

In 2020, the average exchange rate was ₱49.624 per U.S. dollar, compared to ₱51.796 per U.S. dollar in 2019. The appreciation of the peso against the U.S. dollar in 2020 was partly attributable to a higher decrease in the Republic’s imports as compared to its exports, which improved its balance of payment position. The Republic’s access to foreign loans and bonds on favorable terms, which increased its foreign reserves, also helped sustain confidence in the peso.

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The Philippine Financial System

Composition

The following table sets out the total resources of the Philippine financial system by category of financial institution.


	Total Resources of the Financial System⁽¹⁾
	As of December 31,
	2016		2017⁽²⁾		2018		2019		2020⁽³⁾			2021⁽⁴⁾
	(₱ *in billions)*
Banks
Universal/Commercial banks		12,560.5		14,053.8		15,691.5		17,216.1		18,527			18,456
Thrift banks		1,122.0		1,213.9		1,293.2		1,203.9		1,192			1,181
Rural banks		231.7		256.5		273.9		291.5		301	⁽⁵⁾		N/A

Total banks		13,914.2		15,524.3		17,258.6		18,711.5		24,093			19,937

Non-bank financial institutions⁽⁶⁾		3,328.6		3,738.1		3,841.5		4,219.0		4,072	⁽⁷⁾		N/A

Total assets		17,242.8		19,262.4		21,100.1		22,930.5		24,093			24,009

Source: Bangko Sentral.

Notes:

(1)	Excludes assets of Bangko Sentral. The amounts presented here include allowance for probable losses.

(2)	Data was revised starting March 2017 to include Other Financial Corporations data.

(3)	Preliminary data.

(4)	Preliminary data as of February 28, 2021, unless otherwise indicated.

(5)	Preliminary revised data as of September 30, 2020.

(6)

Includes Investment Houses, Finance Companies, Investment Companies, Securities Dealers/Brokers, Pawnshops, Lending Investors, Non Stocks Savings and Loan Associations, Credit Card Companies (which are under Bangko Sentral supervision), and Private and Government Insurance Companies (i.e., SSS and GSIS).

(7)	Preliminary revised data as of June 30, 2020.

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Structure of the Financial System

The following table sets out the outstanding loans of universal and commercial banks classified by sector.


	Universal and Commercial Banks’ Outstanding Loans by Sector⁽¹⁾
	As of December 31,
	2018				2019				2020				2021⁽²⁾
	(₱ *in millions, except percentages)*
Total		8,584,051	100.0	%		9,508,752	100.0	%		9,442,155	100.0	%		7,827,678	100	%
Agriculture, Forestry and Fishing		192,216	2.2	%		221,873	2.3	%		211,383	2.2	%		199,508	5.5	%
Mining and Quarrying		53,926	0.6	%		47,974	0.5	%		43,454	0.5	%		42,737	0.6	%
Manufacturing		1,068,469	12.4	%		1,048,724	11.5	%		993,213	10.8	%		974,304	12.6	%
Electricity, Gas, Steam & Air conditioning Supply		929,456	10.8	%		1,006,431	10.7	%		1,043,966	10.5	%		1,047,301	13.4	%
Water Supply, Sewerage, Waste Management and Remediation Activities		82,473	1.0	%		106,010	1.0	%		103,685	1.1	%		105,006	1.3	%
Construction		298,704	3.5	%		368,663	3.8	%		375,630	4.0	%		342,947	4.4	%
Wholesale & Retail Trade, Repair of Motor Vehicles and Motorcycles		1,159,976	13.5	%		1,193,922	12.6	%		1,112,621	11.8	%		1,054,767	13.5	%
Accommodation and Food Services Activities		152,521	1.8	%		153,708	1.6	%		162,357	1.7	%		158,399	2.0	%
Transportation and Storage		271,363	3.2	%		287,949	3.0	%		302,212	3.2	%		302,428	3.9	%
Information and Communication		316,403	3.7	%		357,270	3.7	%		376,132	3.9	%		370,929	4.7	%
Financial and Insurance Activities		787,383	9.2	%		923,805	9.5	%		881,006	9.3	%		812,196	10.4	%
Real Estate Activities		1,402,372	16.3	%		1,677,815	17.8	%		1,768,134	18.7	%		1,768,577	22.6	%
Professional, Scientific and Technical Activities		71,392	0.8	%		68,139	0.5	%		54,574	0.6	%		50,672	0.7	%
Administrative and Support Services Activities		36,222	0.4	%		41,558	0.4	%		37,621	0.4	%		32,989	0.4	%
Public Administration and Defense; Compulsory Social Security		136,068	1.6	%		142,380	1.5	%		144,647	1.5	%		142,700	1.8	%
Education		39,747	0.5	%		42,850	0.5	%		39,927	0.4	%		38,388	0.5	%
Human Health and Social Work Activities		55,609	0.6	%		59,890	0.6	%		89,340	1.0	%		87,847	1.1	%
Arts, Entertainment and Recreation		132,183	1.5	%		146,781	1.6	%		150,136	1.6	%		149,250	1.9	%
Other Community, Social & Personal Activities		127,994	1.5	%		100,196	0.8	%		65,011	0.7	%		77,909	10.0	%
Activities of Households as Employers, Undifferentiated Goods & Services		85,646	1.0	%		79,794	0.9	%		86,262	0.9	%		68,825	0.9	%
Others⁽³⁾		1,183,928	13.9	%		1,433,021	15.2	%		1,400,847	14.8	%		1,379,125	17.6	%

Source: Bangko Sentral.

Notes:

(1)	Net of amortization.

(2)	Preliminary data as of the two months ended February 28, 2021.

(3)	Includes loans to individuals for household consumption purposes, loans under Bangko Sentral’s reverse repurchase arrangement and loans to non-residents.

Non-Performing Loans

In view of the effects of the COVID-19 pandemic, the Philippine banking industry experienced a significant increase in non-performing loans (“NPLs”) between December 31, 2019 and December 31, 2020. Going forward, the Government expects NPLs to begin moderating in 2021 and 2022 as the COVID-19 pandemic draws to a close, the economy begins to recover, and the effects of the newly passed FIST Act, which facilitates banks and other financial institutions disposing of their non-performing assets and bad loans, begin to be felt in the Philippine banking system.

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The following table provides information regarding NPLs for universal and commercial banks as of the dates indicated.


	Total Loans (Gross) and Non-Performing Loans by type of Bank
	As of December 31,
	2016			2017			2018			2019			2020			2021⁽²⁾
	(₱ *in billions, except percentages)*
Expanded commercial/Universal banks
Total loans		5,177.6			6,041.0			6,881.3			7,682.5			7,711.7			7,504.7
Non-performing loans		68.2			72.0			84.1			111.9			244.6			278.2
Ratio of non-performing loans to total loans		1.3	%		1.2	%		1.2	%		1.5	%		3.2	%		3.7	%
Non-expanded/Commercial banks⁽¹⁾
Total loans		264.0			309.8			345.1			360.2			361.0			378.5
Non-performing loans		9.1			8.7			9.5			11.0			17.6			18.7
Ratio of non-performing loans to total loans		3.5	%		2.8	%		2.8	%		3.1	%		4.9	%		4.9	%
Government banks⁽³⁾
Total loans		760.6			968.3			1,196.4			1,305.9			1,321.3			1,272.0
Non-performing loans		12.0			12.5			15.6			28.6			36.3			38.2
Ratio of non-performing loans to total loans		1.6	%		1.3	%		1.3	%		2.2	%		2.8	%		3.0	%
Foreign banks⁽⁴⁾
Total loans		504.0			548.1			595.0			605.4			525.5			487.0
Non-performing loans		4.5			4.3			4.3			5.0			10.2			8.5
Ratio of non-performing loans to total loans		0.9	%		0.8	%		0.7	%		0.8	%		2.0	%		1.7	%
Total loans		6,706.3			7,867.1			9,017.8			9,954.0			9,919.5			9,642.1
Total non-performing loans		93.8			97.5			113.5			156.5			308.8			343.6
Ratio of non-performing loans to total loans		1.4	%		1.2	%		1.3	%		1.6	%		3.1	%		3.6	%

Source: Bangko Sentral.

Notes:

(1)	Consists of two foreign bank subsidiaries.

(2)	Preliminary data as of February 28, 2021.

(3)	Consists of the LBP, the DBP and Al-Amanah Islamic Investment Bank of the Philippines.

(4)	Consists of 24 foreign banks, and excludes two foreign bank subsidiaries.

As of December 31, 2020, the gross non-performing loan ratio for universal and commercial banks was 3.1%, which was higher than the ratio of 1.6% recorded as of December 31, 2019. Non-performing loans increased significantly by 97.3% to ₱308.8 billion as of December 31, 2020 from the ₱156.5 billion recorded as of December 31, 2019, primarily due to the effects of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers which resulted in declining asset quality and growing total loan portfolio. The banking system’s total loan portfolio decreased by 0.4% to ₱9,919.5 billion as of December 31, 2020 from the ₱9,954.0 billion recorded as of December 31, 2019.

As of February 28, 2021, the gross non-performing loan ratio for universal and commercial banks was 3.6%, which was higher than the ratio of 3.1% recorded as of December 31, 2020. Non-performing loans increased by 11.3% to ₱343.6 billion as of February 28, 2021 from the ₱308.8 billion recorded as of December 31, 2020, primarily due to the effects of the ongoing global COVID-19 pandemic and the resulting domestic shutdowns, border controls, reduced tourism, disrupted trade and manufacturing and financial market spillovers which resulted in declining asset quality and growing total loan portfolio. The banking system’s total loan portfolio increased by 2.8% to ₱9,642.1 billion as of February 28, 2021 from the ₱9,919.5 billion recorded as of December 31, 2020.

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The Philippine Securities Markets

History and Development

The PSEi closed at 6,443.09 points on March 31, 2021 compared to a close of 7,139.71 points on December 29, 2020. As of December 27, 2019, the PSEi closed at 7,815.26 compared to a close of 7,466.02 on December 29, 2018, 8,558.4 on December 29, 2017, 6,840.6 on December 30, 2016 and 6,952.1 on December 29, 2015. In 2019, the average PSEi was 7,908.89, compared to the average PSEi level of 7,744.97 in 2018, 7,850.50 in 2017, 7,284.49 in 2016 and 7,432.61 in 2015.

Government Securities Market

As of December 31, 2020, outstanding Government securities amounted to ₱6.7 trillion, 51.2% of which were issuances of treasury bills and fixed rate treasury bonds. The remaining issuances of Government securities consisted of retail treasury bonds, benchmark bonds and onshore dollar bonds, among others.

As of February 31, 2021, outstanding Government securities amounted to ₱6.8 trillion, 14.8% of which were issuances of treasury bills and fixed rate treasury bonds. The remaining issuances of Government securities consisted of retail treasury bonds, benchmark bonds and onshore dollar bonds, among others.

Public Finance

The Consolidated Financial Position

The following table sets out the consolidated financial position on a cash basis for the periods indicated.


	Consolidated Public Sector Financial Position of the Republic
	For the year ended December 31,
	2016			2017			2018			2019			2020⁽¹⁾
	(₱ *in billions, except percentages)*
Public sector borrowing requirement:
National Government		(353.4	)		(350.6	)		(558.3	)		(660.2	)		(879.2	)
CB Restructuring		(3.2	)		(4.8	)		(0.0	)		(0.0	)		0.0
Monitored Government-owned corporations		20.9			40.2			5.5			(0.7	)		21.7
Adjustment of net lending and equity to GOCCs		15.3			(3.9	)		5.4			20.5			24.3
Other adjustments		0.0			0.0			0.0			0.0			0.0
Total public sector borrowing requirement		(320.4	)		(319.1	)		(547.3	)		(640.4	)		(833.2	)
As a percentage of GDP		(2.1	)%		(1.9	)%		(3.0	)%		(3.3	)%		(6.5	)%
Other public sector:
Social Security System and Government Service Insurance System		72.1			58.3			63.2			53.9			33.3
Bangko Sentral⁽²⁾		17.7			21.8			37.0			44.0			(17.0	)
Government financial institutions		15.5			17.2			20.5			26.1			17.9
Local government units		193.4			217.4			255.5			259.0			277.5
Timing adjustment of interest payments to Bangko Sentral		0.0			0.0			0.0			0.0			0.0
Other adjustments		0.0			0.0			0.0			0.0			0.0
Total other public sector		298.7			314.6			376.3			382.9			311.7
Consolidated public sector financial position		(21.8	)		(4.6	)		(171.0	)		(257.5	)		(521.5	)
As a percentage of GDP		(0.1	)%		(0.03	)%		(0.9	)%		(1.3	)%		(4.1	)%

Source: Fiscal Policy and Planning Office, Department of Finance.

Note:

(1)	Preliminary data for the nine months ended September 30, 2020.

(2)	Amounts are net of interest rebates, dividends and other amounts remitted to the Government and the Central Bank-Board of Liquidation.

In the nine months ended September 30, 2020, the consolidated public sector financial position of the Republic recorded a deficit of ₱521.5 billion, a reversal from surplus of ₱123.2 billion recorded in the nine

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months ended September 30, 2019. The reversal from surplus to deficit was largely due to a significant increase in expenditures and a significant decrease in tax revenues, primarily due to the adverse impact of the ongoing global COVID-19 pandemic on the Philippine economy. This increased the National Government’s borrowing requirements, which deficit increased from ₱299.0 billion in the nine months ended September 30, 2019 to ₱879.2 billion in the nine months ended September 30, 2020, equivalent to 6.9% of the Republic’s GDP for the nine months ended September 30, 2020 at current prices.

The Republic expects a higher fiscal deficit in 2021, primarily due to a significant increase in expenditures and a significant decrease in tax revenues resulting from the adverse impact of the ongoing global COVID-19 pandemic on the Philippine economy.

Government Revenues and Expenditures

The following table sets out Government revenues and expenditures for the periods indicated.


	Government Revenues and Expenditures
	For the year ended December 31,
	Actual⁽¹⁾															Budget
	2016			2017			2018			2019			2020			2019			2020
	(₱ *in billions, except percentages)*
Cash Revenues
Tax revenues:
Bureau of Internal Revenue		1,567.2			1,772.3			1,951.9			2,175.5			1,951.0			2,271.4			1,685.7
Bureau of Customs		396.4			458.2			593.1			630.3			537.7			661.0			506.2
Others Government offices⁽²⁾		16.8			20.2			20.9			21.8			15.7			23.0			13.3

Total tax revenues		1,980.4			2,250.7			2,565.8			2,827.7			2,504.4			2,955.4			2,205.2
As a percentage of GDP (at then-current market prices)		13.1	%		13.6	%		14.0	%		14.5	%		14.0	%		15.1	%		12.3	%
Non-tax revenues:
Bureau of the Treasury income		101.7			99.9			114.2			146.5			219.7			73.9			213.3
Fees and charges		39.8			40.8			52.7			55.4			23.1			53.3			38.1
Privatizations		0.7			0.8			15.7			0.8			0.5			2.0			0.5
Others (including Foreign grants)		73.3			80.9			101.7			107.0			108.3			41.0			62.8

Total non-tax revenues		215.4			222.4			284.3			309.6			351.3			194.2			314.6

Total revenues		2,195.9			2,473.1			2,850.2			3,137.5			2,856.0			3,149.7			2,519.8

Expenditures
Allotment to local government units		449.8			530.2			575.7			618.0			804.5			469.5			621.6
Interest payments
Foreign		99.0			100.1			106.0			110.6			101.4			120.2			122.0
Domestic		205.4			210.5			243.2			250.3			279.1			279.4			299.3

Total interest payments		304.5			310.5			349.2			360.9			380.4			399.6			421.3

Tax expenditures		15.8			8.3			21.6			27.3			33.1			14.5			14.7
Subsidy		103.2			131.1			136.7			201.5			230.4			158.7			244.1
Equity and net lending		27.0			1.1			8.9			20.4			34.9			29.4			78.1
Others		1,649.1			1,842.5			2,316.5			2,569.6			2,774.0			2,698.1			2,955.4

Total expenditures		2,549.3			2,823.8			3,408.4			3,797.7			4,227.4			3,769.7			4,335.2

Surplus/(Deficit)		(353.4	)		(350.6	)		(558.3	)		(660.2	)		(1,371.4	)		(620.1	)		(1,815.4	)
Financing
Net domestic borrowings		355.1			731.4			591.5			691.5			1,898.4			902.6			2,134.8
Gross domestic borrowings		357.5			733.6			594.5			693.8			1,998.7			906.2			2,137.7
Less: Amortization		2.4			2.2			2.9			2.4			100.3			3.5			2.9
Net foreign borrowings		(24.1	)		27.6			191.8			184.8			600.8			140.0			610.8

Total net financing requirement		331.0			758.9			783.3			876.3			2,499.2			1,042.6			2,745.7

Change in cash		(257.7	)		255.4			(52.7	)		(224.6	)		701.7

Sources: Bureau of the Treasury; Department of Finance; Department of Budget and Management.

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Notes:

(1)	Follows the GFSM 2014 concept wherein reporting of debt amortization reflect the actual principal repayments to creditor including those serviced by the Bond Sinking Fund; while financing includes gross proceeds of liability management transactions such as bond exchange.

(2)	Represents tax revenues of the Department of Environment and Natural Resources, Bureau of Immigration and Deportation, Land Transportation Office and other Government entities.

Revenues

Sources

Total Government revenues in 2020 were ₱2,856.0 billion, a 9.0% decrease over the ₱3,137.5 billion recorded in 2019. This was primarily the result of lower collection by the Bureau of Internal Revenue and the Bureau of Customs in 2020 as a result of the economic effects of the COVID-19 pandemic, which effect was partially offset by an increase in the collection of non-tax revenues in 2020 as compared to the same period in 2019. In 2020, the Bureau of Internal Revenue collections were ₱1,951.0 billion, a 10.3% decrease from the ₱2,175.5 billion recorded in 2019. The Bureau of Customs recorded collections of ₱537.7 billion in 2020, a 14.7% decrease from the ₱630.3 billion recorded in 2019. Non-tax revenues were ₱351.3 billion in 2020, a 13.5% increase from the ₱309.6 billion recorded in 2019.

Expenditures

Total Government expenditures in 2020 were ₱4,227.4 billion, an 11.3% increase over the ₱3,797.7 billion recorded in 2019. This increase was primarily due to higher disbursements relating to the Government’s efforts to contain the COVID-19 pandemic. Total expenditures in 2020 were 2.5% lower than the program target of ₱4,335.2 billion for the year.

The Government Budget

The Budget Process

2021 Budget

On December 28, 2020, President Duterte signed into law Republic Act No. 11518, or the General Appropriations Act for 2021. The 2021 budget set program expenditures at ₱4.5 trillion, 10% higher than the ₱4.1 trillion 2020 budget.

The 2021 budget was developed as a blueprint to recovery in response to the COVID-19 pandemic. The social services sector received the largest allocation of the 2021 budget, totaling ₱1.7 trillion, corresponding to approximately 37% of the total budget. This is followed by the economic services sector, which includes the Duterte administration’s “Build, Build, Build” program, with an allocation of ₱1.3 trillion, or approximately 29% of the budget. Finally, the general public services sector has been allocated ₱0.8 trillion, or approximately 17% of the budget.

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The 10 executive departments with the highest allocations under the 2021 allocations compared to their corresponding allocations for 2020 are listed below. The amounts indicated below are the departments’ “all-in” budgets, comprising department-specific budgets plus allocations from special purpose funds.


Department	2021 Allocation		2020 Allocation		2020 Increase/ (Decrease) from 2020
	(₱ *in billions)*
Department of Education⁽¹⁾		751.7		692.6		27.5
Department of Public Works and Highways		695.7		581.7		116.5
Department of the Interior and Local Government		249.3		241.6		11.2
Department of Social Welfare and Development		176.9		200.5		22.6
Department of National Defense		205.8		192.1		5.6
Department of Health⁽²⁾		210.2		175.9		7.0
Department of Transportation		87.9		100.6		31.2
Department of Agriculture		71.0		64.7		15.0
The Judiciary		45.3		41.2		1.7
Department of Labor and Employment		37.1		17.4		3.5

Notes:

(1)	Including States Universities and Colleges, Commission on Higher Education and the Technical Education and Skills Development Authority.

(2)	Including the Philippine Health Insurance Corporation.

Debt

External Debt

The following table sets out the total outstanding Bangko Sentral-approved and registered external debt.


	Bangko Sentral Approved External Debt
	As of December 31,
	2016		2017		2018		2019		2020
	*($ in millions, except percentages)*
By Maturity:
Short-term⁽¹⁾		14,526		14,275		16,068		17,208		14,209
Medium and long-term		60,237		58,823		62,892		66,410		84,279

Total		74,763		73,098		78,960		83,618		98,488

By Debtor:⁽²⁾
Banking system		19,037		19,144		22,672		23,943		21,559
Public sector⁽³⁾		55,726		53,954		56,287		59,675		76,929

Total		74,763		73,098		78,960		83,618		98,488

By Creditor Type:
Banks and financial institutions		25,790		22,539		26,529		26,478		24,006
Suppliers		2,520		3,071		3,015		4,187		3,136
Multilateral		11,971		12,501		13,746		14,428		21,407
Bilateral		10,916		11,260		10,931		10,964		12,752
Bond holders/note holders		21,930		21,779		22,684		25,449		29,416
Others		1,636		1,949		2,054		2,112		2,160

Total		74,763		73,098		78,960		83,618		98,488

Ratios:
Debt service burden to exports of goods, and services & primary income		7.0		6.2		6.6		6.7		6.3
Debt service burden to GNI		2.0		2.0		2.1		2.1		1.8
External debt to GNI		21.1		20.0		20.6		20.2		25.2

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Source:

Bangko Sentral.

Notes:

(1)	Debt with original maturity of one year or less.

(2)	Classification by debtor is based on the primary obligor under the relevant loan or rescheduling documentation.

(3)	Includes public sector debt whether or not guaranteed by the Government; does not include public banks.

Government Financing Initiatives

The following are the major program loans approved by creditor agencies or availed of by the Government from 2016 to 2020.


Program Loan	Creditor	Amount	Date Signed
		($) unless otherwise specified
Second Disaster Risk Management Development Policy Loan with a Catastrophe Deferred Drawdown Option	WB	500 million	January 2016
Social Protection Support Project, Additional Financing	ADB	400 million	April 2016
Social Welfare Development and Reform Project 2	WB	450 million	April 2016
Disaster Risk Reduction and Management Facility	Agence Française de Développement	EUR 50 million	April 2016
Local Government Finance and Fiscal Decentralization Reform Program, Subprogram 2	ADB	250 million	December 2016
Local Government Finance and Fiscal Decentralization Reform Program, Subprogram 2	Agence Française de Développement	EUR 100 million	October 2017
Facilitating Youth School-To-Work Transition Program, Subprogram 1	ADB	300 million	November 2017
Encouraging Investment through Capital Market Reform, Subprogram 2	ADB	EUR 300 million	December 2017
Expanding Private Participation in Infrastructure Program, Subprogram 2	ADB	300 million	August 2018
Inclusive Finance Development Program (Subprogram 1)	ADB	474 million	October 2018
Emergency Assistance for Reconstruction and Recovery of Marawi	ADB	300 million	December 2018
Secondary Education Support Program	ADB	300 million	June 2018
Improving Fiscal Management Project	WB	450 million	March 2019
Social Welfare Development and Reform Project II (Additional Financing)	WB	300 million	June 2019
Local Governance Reform Program (Subprogram 1)	ADB	300 million	December 2019
Facilitating Youth School-to-Work Transition Program (Subprogram 2)	ADB	400 million	December 2019
Promoting Competitiveness and Enhancing Resilience to Natural Disasters Sub-program 1 DPL	WB	400 million	December 2019
COVID-19 Active Response and Expenditure Support Program	ADB	1,500 million	April 2020

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Program Loan	Creditor	Amount	Date Signed
		($) unless otherwise specified
Social Protection Support Project—Second Additional Financing	ADB	200 million	April 2020
Third Disaster Risk Management Development Policy Loan	WB	500 million	April 2020
Support to Capital Market Generated Infrastructure Financing, Subprogram 1	ADB	400 million	June 2020
Expanded Social Assistance Program	ADB	500 million	June 2020
COVID-19 Active Response and Expenditure Program	AIIB	750 million	June 2020
Expanding Private Participation in Infrastructure Program, Subprogram 2	Agence Française de Développement	EUR 150 million	June 2020
Inclusive Finance Development Program, Subprogram 2	Agence Française de Développement	EUR 100 million	June 2020
Emergency COVID-19 Response Development Policy Loan	WB	500 million	June 2020
COVID-19 Crisis Response Emergency Support Loan	Japan International Cooperation Agency	YEN 50 billion	July 2020
Competitive and Inclusive Agriculture Development Program, Subprogram 1	ADB	400 million	August 2020
Inclusive Finance Development Program, Subprogram 2	ADB	300 million	August 2020
Disaster Resilience Improvement Program	ADB	500 million	September 2020
Post Disaster Standby Loan (Phase 2)	Japan International Cooperation Agency	YEN 50 billion	September 2020
Philippines Beneficiary FIRST Social Protection Project	WB	600 million	November 2020
Promoting Competitiveness and Enhancing Resilience to Natural Disasters Subprogram 2 Development Policy Loan	WB	600 million	December 2020

Source: International Finance Group, Department of Finance.

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Public Sector Debt

The following table presents the Republic’s outstanding consolidated public sector debt as of the dates indicated.


	Outstanding Consolidated Public Sector Debt⁽¹⁾
	As of December 31,
	2016		2017		2018		2019		2020⁽²⁾
	(₱ *in billions, except percentages)*
Consolidated non-financial public sector debt:
Domestic		3,141.2		3,812.9		4,000.6		4,280.4		5,322.7
Foreign		2,248.7		2,311.2		2,618.4		2,728.9		3,036.5

Total		5,389.9		6,124.1		6,619.0		7,009.3		8,359.3

Financial public corporations
Bangko Sentral:⁽³⁾
Domestic		3,343.1		3,576.1		3,746.3		3,868.3		4,487.6
Foreign		192.1		200.9		211.6		193.2		185.2

Total		3,535.2		3,777.0		3,957.8		4,061.5		4,672.8

Domestic		3,352.4		3,592.9		3,764.2		3,901.4		4,487.6
Foreign		336.7		331.6		355.1		323.9		185.2

Total		3,689.1		3,924.4		4,119.4		4,225.3		4,672.8

Less: Intrasector-debt holdings
Domestic:
Government securities held by GFIs and Bangko Sentral		669.3		618.4		844.1		908.7		1,836.9
Government deposits at Bangko Sentral		136.9		326.8		170.2		159.9		825.5
GFIs deposits at Bangko Sentral		445.8		385.4		422.3		502.7		640.5
GOCC deposits at Bangko Sentral		0.1		0.0		0.5		0.2		3.26
GOCC loans/other debt held by GFIs		114.9		123.7		134.6		161.2		48.4
GFIs loans/other debt held by Bangko Sentral		53.1		53.0		53.3		53.6		53.6
Local governments debt held by GFIs		67.2		67.7		74.6		87.8		87.3

Total		1,487.3		1,575.1		1,699.5		1,874.1		3,495.4

Foreign:
Governments securities held by Bangko Sentral		78.0		80.3		81.7		85.9		93.9

Total		1,565.3		1,655.4		1,781.3		1,960.0		3,589.4

Total public sector:
Domestic		5,006.2		5,830.7		6,065.3		6,307.7		6,314.9	⁽⁴⁾
Foreign		2,507.4		2,562.4		2,891.8		2,966.9		3,127.8	⁽⁴⁾
Total		7,513.7		8,393.2		8,957.1		9,274.6		9,442.7	⁽⁴⁾

Source: Fiscal Policy and Planning Office, Department of Finance.

Notes:

(1)	The consolidated public sector comprises the general government sector, non-financial public corporations, and financial public corporations, after elimination of intra-debt holdings among these sectors.

(2)	Based on preliminary data as of June 30, 2020.

(3)	Comprises all liabilities of Bangko Sentral (including currency issues) except for allocation of SDRs and revaluation of international reserves.

(4)	Preliminary data as of June 30, 2020.

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The following table presents the Republic’s outstanding consolidated non-financial public sector debt as of the dates indicated.


	Outstanding Consolidated Non-financial Public Sector Debt⁽¹⁾
	As of December 31,
	2016			2017			2018			2019			2020⁽²⁾
	(₱ *in billions, except percentages)*
Total⁽³⁾		5,389.9			6,124.1			6,619.0			7,009.3			7,918.4
Domestic		3,141.2			3,812.9			4,000.6			4,280.4			5,109.3
Foreign		2,248.7			2,311.2			2,618.4			2,728.9			2,809.2
National Government		6,090.3			6,652.4			7,292.5			7,731.3			9,054.1
Domestic		3,934.1			4,441.3			4,776.9			5,127.6			6,190.0
Foreign		2,156.2			2,211.2			2,515.6			2,603.7			2,864.0
Non-financial public corporations (major GOCCs)⁽⁴⁾		451.4			424.8			408.1			430.2			403.6
Domestic⁽⁴⁾		283.6			256.4			233.5			236.7			215.0
Foreign⁽⁴⁾		167.9			168.4			174.7			193.6			188.6
Extrabudgetary: NIA and PNR		4.9			3.8			2.6			1.2			1.1
Domestic		2.9			2.3			1.1			0.1			0.0
Foreign		2.0			1.6			1.4			1.2			1.1
Local government units⁽⁵⁾		86.7			86.4			94.2			107.2			107.1
Domestic		86.7			86.4			94.2			107.2			107.1
Foreign		0			0			0			0.0			0.0
Less: Government debt held by Bond Sinking Fund⁽⁶⁾		634.0			531.2			501.9			562.0			634.8
Domestic		561.5			466.1			433.7			497.4			578.9
Foreign		72.4			65.1			68.2			64.6			55.9
Intra-sector debt holdings (domestic)		526.0			428.9			604.2			623.4			609.1
Government debt held by SSIs		518.8			421.5			595.7			613.9			599.6
Government debt held by LGUs		0.0			0.0			0.0			0.01			0.01
LGU loans held by MDFO		7.2			7.4			8.4			9.5			9.5
Government debt held by GOCCs		19.8			23.0			20.6			25.1			24.4
Onlending from National Government to GOCCs		58.7			55.4			46.6			45.3			43.6
Intra-sector debt holdings (external)		4.8			4.9			5.1			4.9			4.8
GOCCs debt held by National Government		4.8			4.9			5.1			4.9			4.8
Total (as % of GDP)		49.7	%		50.7	%		49.0	%		47.5	%		49.6	%⁽⁷⁾
Domestic (as % of GDP)		35.9	%		41.8	%		43.5	%		45.2	%		33.6	%⁽⁷⁾
Foreign (as % of GDP)		18.0	%		18.4	%		20.7	%		21.3	%		16.6	%⁽⁷⁾

Source: Fiscal Policy and Planning Office, Department of Finance.

Notes:

(1)	The consolidated non-financial public sector comprises the general government sector and non-financial public corporations. The consolidated non-financial public sector does not include financial public corporations.

(2)	Based on data as of June 30, 2020.

(3)	Government debt under the revised methodology excludes contingent obligations.

(4)	Excludes extrabudgetary items (NIA and PNR).

(5)	Borrowings from private banks guaranteed by the LGUs since the fourth quarter of 2016.

(6)	Including Securities Stabilization Fund and adjustment in the Government debt held by the Bond Sinking Fund.

(7)	Preliminary data as of June 30, 2020 and calculated using GDP over the previous four quarters.

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Based on preliminary data, as of June 30, 2020, the outstanding consolidated public sector debt was ₱9.3 trillion, equivalent to 49.6% of the Republic’s GDP, compared with a public sector-debt-to-GDP ratio of 47.5% as of December 31, 2019. As of June 30, 2020, total outstanding consolidated Government debt was ₱7.9 trillion, reflecting a 19.0% increase over the ₱6.7 trillion recorded as of December 31, 2019. Total domestic debt increased by 24.2% to ₱5.1 trillion on June 30, 2020 from ₱4.1 trillion on December 31, 2019. Foreign debt increased by 10.6% to ₱2.8 trillion on June 30, 2020 from ₱2.5 trillion on December 31, 2019. The overall increase in Government debt was attributed to an increase in borrowings and issuances of securities by the Government during the period from December 31, 2019 to June 30, 2020.

Direct Debt of the Republic

The following table summarizes the outstanding direct debt of the Republic as of the dates indicated.


	Outstanding Direct Debt of the Republic⁽¹⁾⁽²⁾
	As of December 31,
	2016		2017		2018		2019		2020		2021⁽³⁾
	(₱ *in millions, except as otherwise indicated)*
Medium/long-term debt⁽⁴⁾		5,801,727		6,337,111		6,797,270		7,240,159		8,838,966		8,851,837
Domestic		3,645,563		4,125,943		4,281,605		4,636,469		5,738,647		5,809,071
External (US$)		43,324		44,261		47,860		51,252		64,562		62,540
Short-term debt⁽⁵⁾
Domestic		287,936		314,369		494,306		491,131		956,040		1,553,997
Total debt		6,089,664		6,652,430		7,292,500		7,731,290		9,795,006		10,405,834

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)

Includes Government debt that is on-lent to GOCCs and other public sector entities. Excludes debt guaranteed by the Government and debt originally guaranteed by other public sector entities for which the guarantee has been assumed by the Government. The table reflects debt of the Government only and does not include any other public sector debt.

(2)	Amounts in original currencies were translated into U.S. dollars or pesos, using Bangko Sentral’s reference exchange rates at the end of each period.

(3)	Based on preliminary data as of February 28, 2021.

(4)	Debt with original maturities of one year or longer.

(5)	Debt with original maturities of less than one year.

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Direct Domestic Debt of the Republic

The following table summarizes the outstanding direct domestic debt of the Republic as of the dates indicated.


	Outstanding Direct Domestic Debt of the Republic⁽¹⁾⁽²⁾
	As of December 31,
	2016		2017		2018		2019		2020		2021⁽³⁾
	(₱ *in millions)*
Loans
Direct		156		156		156		156		156		540,156
Assumed⁽⁴⁾		442		792		792		792		792		792

Total loans		598		948		948		948		948		540,948

Securities
Treasury bills		287,936		314,369		494,306		486,170		949,479		1,007,436
Treasury notes/bonds		3,645,563		4,125,942		4,281,605		4,640,482		5,744,260		5,814,684

Total securities		3,933,499		4,440,312		4,775,911		5,126,652		6,693,739		6,822,120

Total debt		3,934,097		4,441,260		4,776,859		5,127,600		6,694,687		7,363,068

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)

Includes Government debt that is on-lent to GOCCs and other public sector entities. Excludes debt guaranteed by the Government and debt originally guaranteed by other public sector entities for which the guarantee has been assumed by the Government. The table reflects debt of the Government only, and does not include any other public sector debt.

(2)	Amounts in original currencies were translated into U.S. dollars or pesos, using Bangko Sentral’s reference exchange rates at the end of each period.

(3)	Based on preliminary data as of February 28, 2021.

(4)	Assumed loans of the Development Bank of the Philippines, the National Development Company and the Philippine National Bank.

The following table sets out the direct domestic debt service requirements of the Republic for the years indicated.


	Direct Domestic Debt Service Requirements of the Republic⁽¹⁾
Year	Principal Repayments		Interest Payments		Total⁽²⁾
	(₱ *in millions)*				(₱ *in millions)*		*($ in millions)*
2016		374,225		200,090		574,315		12,353
2017		229,330		206,571		435,902		8,718
2018		315,461		223,751		539,213		10,307
2019		481,575		360,874		842,449		16,583
2020		430,832		255,390		686,222		14,290
2021⁽³⁾		507,615		283,356		790,971		16,471
2022⁽³⁾		645,864		264,123		909,987		18,950
2023⁽³⁾		897,372		220,803		1,118,176		23,285

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)	Excludes debt service in respect of Government debt that is on-lent to GOCCs and other public sector entities guaranteed by the Government and debt originally guaranteed by other public sector entities for which the guarantee has been assumed by the Government.

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(2)

Amounts in pesos were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates at the end of each period. For 2020 and the period from 2021 to 2023, amounts in pesos were translated into U.S. dollars using the Bangko Sentral’s January 4, 2021 reference exchange rates bulletin.

(3)	Projection based on outstanding balance as of December 31, 2020.

Direct External Debt of the Republic

The following table summarizes the outstanding direct external debt of the Republic as of the dates indicated.


	Outstanding Direct External Debt of the Republic⁽¹⁾⁽²⁾
	As of December 31,
	2016		2017		2018		2019		2020		2021⁽³⁾
	*($ in millions)*
Loans:
Multilateral		10,182		10,709		11,726		12,793		19,275		19,850
Bilateral		6,170		6,238		6,289		6,484		8,042		8,098
Commercial		11		10		7		5		2		2
Total loans		16,363		16,957		18,022		19,282		27,319		27,950
Securities:
Euro Bonds		0		0		0		841		2,387		2,354
Yen Bonds		850		891		2,316		3,184		2,388		2,312
Philippine Peso Notes		2,606		2,596		2,467		2,553		2,700		1,759
Chinese Yuan Bonds		—		—		212		569		607		612
U.S. dollar Bonds		23,505		23,817		24,842		24,823		29,161		27,553

Total securities		26,961		27,304		29,838		31,970		37,243		34,590

Total		43,324		44,261		47,860		51,252		64,562		62,540

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)

Includes Government debt that is on-lent to GOCCs and other public sector entities. Excludes debt guaranteed by the Government and debt originally guaranteed by other public sector entities for which the guarantee has been assumed by the Government. The table reflects debt of the Government only, and does not include any other public sector debt.

(2)	Amounts in original currencies were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates at the end of each period.

(3)	Based on preliminary data as of February 28, 2021.

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The following table sets out, by designated currency and the equivalent amount in U.S. dollars, the outstanding direct external debt of the Republic as of the date indicated.


	Summary of Outstanding Direct External Debt of the Republic by Currency⁽¹⁾
	as of December 31, 2020
	Amount in Original Currency		Equivalent Amount in $⁽²⁾		% of Total
	(in millions, unless otherwise indicated, except percentages)
U.S. dollar		47,660		47,660		73.8	%
Japanese yen		919,064		8,914		13.8	%
Peso		129,679		2,700		4.2	%
Euro		3,437		4,207		6.5	%
Other currencies		—		1,081		1.7	%

Total		—		64,562		100	%

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)

(2)	Amounts in original currencies were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates as of January 4, 2021, which was the next business day following the end of the period indicated.

The following table sets out the direct external debt service requirements of the Republic for the years indicated.


	Direct External Debt Service Requirements of the Republic⁽¹⁾
	Principal Repayments		Interest Payments		Total
	*($ in millions)*
2016⁽²⁾		3,655		2,130		5,785
2017⁽²⁾		2,813		2,003		4,816
2018⁽²⁾		2,114		2,013		4,127
2019⁽²⁾		2,637		2,108		4,746
2020⁽²⁾		2,832		1,987		4,819
2021⁽³⁾⁽⁴⁾		4,930		1,874		6,804
2022⁽³⁾⁽⁴⁾		2,619		1,786		4,405
2023⁽³⁾⁽⁴⁾		2,334		1,716		4,050

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)	Excludes debt service in respect of Government debt that is on-lent to GOCCs and other public sector entities or guaranteed by the Government, other than debt originally guaranteed other public sector entities for which the guarantee has been assumed by the Government.

(2)	Amounts in original currencies were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates prevailing on the date of payment.

(3)	Amounts in original currencies were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates prevailing on January 4, 2021.

(4)	Projection based on outstanding balance as of December 31, 2020.

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Government-Guaranteed Debt

The following table sets out guarantees of indebtedness by the Republic, including guarantees assumed by the Government, as of the dates indicated.


	Summary of Outstanding Guarantees of the Republic⁽¹⁾⁽²⁾
	As of December 31,
	2015		2016		2017		2018		2019		2020		2021⁽³⁾
	(₱ *in billions)*
Total (₱)		545.1		513.7		478.1		487.6		488.8		458.3		446.7

Domestic (₱)		245.6		233.4		197.5		197.5		260.8		254.4		244.1
External (₱)		299.5		280.3		280.6		290.0		228.0		203.9		202.6
External ($ in billions)⁽⁴⁾		6.3		5.6		5.6		5.5		4.5		4.2		4.2

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)	Includes debt originally guaranteed by the Government and debt guaranteed by other public sector entities for which the guarantee has been assumed by the Government.

(2)	Amounts in original currencies were translated into U.S. dollars or pesos, as applicable, using Bangko Sentral’s reference exchange rates at the end of each period, unless otherwise indicated.

(3)	Based on preliminary data as of February 28, 2021.

(4)	Amounts in original currencies were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates at the end of each period.

Payment History of Foreign Debt

The following table sets out the outstanding foreign-currency bonds issued by the Republic as of the dates indicated.


	Foreign Currency Bonds Issued by the Republic⁽¹⁾
	Original Balance as of Issue Date⁽²⁾		Outstanding Balance as of December 31, 2019⁽³⁾		Outstanding Balance as of December 31, 2020⁽⁴⁾
	*($ in millions)*
U.S. dollar bonds		30,938		24,823		29,161
Chinese Yuan bonds		592		569		607
Euro bonds		2,170		841		2,387
Japanese yen bonds		2,256		3,184		2,388

Total foreign-currency bonds		35,956		29,417		34,543

Source: Bureau of the Treasury, Department of Finance.

Notes:

(1)	Excludes debt securities of GOCCs and other public sector entities guaranteed by the Government.

(2)	Represents the aggregate of the original balances as of the issue dates of foreign currency bonds outstanding as of December 31, 2020. Amounts in original currencies were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rates prevailing on the date of issuance.

(3)	Amounts were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rate as of January 2, 2020.

(4)	Amounts were translated into U.S. dollars using the applicable Bangko Sentral reference exchange rate as of January 4, 2021.

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DESCRIPTION OF THE GLOBAL BONDS

General

The global bonds will be issued under a fiscal agency agreement, dated as of October 4, 1999, as supplemented by supplement no. 1 to the fiscal agency agreement dated February 26, 2004, supplement no. 2 to the fiscal agency agreement dated January 11, 2006 and a supplement no. 3 to the fiscal agency agreement dated February 1, 2018, between the Republic and The Bank of New York Mellon (as successor in interest to JPMorgan Chase Bank, N.A.), as fiscal agent (the “fiscal agency agreement”). The global bonds are a series of debt securities more fully described in the accompanying prospectus, except to the extent indicated below.

The global bonds will be the direct, unconditional, unsecured and general obligations of the Republic and will rank without any preference among themselves and equally with all other present and future unsecured and unsubordinated External Indebtedness (as defined in the accompanying prospectus) of the Republic. It is understood that this provision shall not be construed so as to require the Republic to make payments under the global bonds ratably with payments being made under any other external indebtedness of the Republic.

The following statements are subject to the provisions of the fiscal agency agreement and the global bonds. Since the following is only a summary, we urge you to read the fiscal agency agreement and the form of global bonds before deciding whether to invest in the global bonds. The Republic has filed forms of these documents as exhibits to the registration statement numbered 333-249557. You should refer to the exhibits for more complete information. Capitalized terms not defined below shall have the respective meanings given in the accompanying prospectus.

The 20 global bonds will:

•

bear interest at % from , 2021;

•

mature at par on ;

•

pay interest on of each year. The first interest payment will be made on , 2022 in respect of the period from (and including) , 2021 to (but excluding) , 2022; and

•

pay interest to the persons in whose names the global bonds are registered on the record date, which is the close of business on the preceding (whether or not a business day); provided that so long as the global bonds are settled through the facilities of Clearstream and Euroclear, the record date shall be the close of business (in the relevant clearing system) on the Business Day before the relevant interest payment date, where Business Day means a day on which the relevant clearing system is open for business.

The 20 global bonds will:

•

bear interest at % from , 2021;

•

mature at par on ;

•

pay interest on of each year. The first interest payment will be made on , 2022 in respect of the period from (and including) , 2021 to (but excluding) , 2022; and

•

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The 20 global bonds will:

•

bear interest at % from , 2021;

•

mature at par on ;

•

pay interest on of each year. The first interest payment will be made on , 2022 in respect of the period from (and including) , 2021 to (but excluding) , 2022; and

•

Interest on the global bonds will be calculated on the basis of the actual number of days in the period for which interest is being calculated. This payment convention is referred to as Actual/Actual (ICMA) as defined in the rulebook of the International Capital Market Association.

In any case where the due date for the payment of the principal of (and premium, if any, on) or interest on any global bond shall be, at any place from which any check in respect thereof is to be mailed or where such global bond is to be surrendered for payment or, in the case of payments by transfer, where such transfer is to be made, a day on which banking institutions in London are authorized or obligated by law to close or the Trans-European Automated Real-Time Gross Settlement Express Transfer (“TARGET 2”) System (or any successor thereto) is not operating, then such payment need not be made on such date at such place but may be made on the next succeeding day at such place which is not a day on which banking institutions in London are authorized or obligated by law to close or which is a day the TARGET 2 System (or any successor thereto) is operating, as the case may be, with the same force and effect as if made on the date for such payment, and no interest shall be payable in respect of any such delay.

The global bonds will be designated Collective Action Securities, and, as such, will contain provisions regarding default, acceleration, voting on amendments, modifications, changes, waivers, future issues of global bonds and other reserve matters listed in the fiscal agency agreement, which are commonly referred to as “collective action clauses.” Under these provisions, which are described in the section entitled “Collective Action Securities,” on page 19 of the accompanying prospectus, the Republic may, among other things, amend the payment provisions of any series of debt securities (including the global bonds) and other reserve matters listed in the fiscal agency agreement with the consent of the holders of: (i) with respect to a single series of debt securities, more than 75% of the aggregate principal amount of the outstanding debt securities of such series; (ii) with respect to two or more series of debt securities, if certain “uniformly applicable” requirements are met, more than 75% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate; or (iii) with respect to two or more series of debt securities, more than 66^²⁄₃% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate, and more than 50% of the aggregate principal amount of the outstanding debt securities of each series affected by the proposed modification, taken individually.

The Republic will apply to the Euro MTF for listing of, and permission to deal in, the global bonds in accordance with the rules of the Luxembourg Stock Exchange. Application will be made to admit the global bonds to listing on the Official List of the Luxembourg Stock Exchange and to trading on the Euro MTF. We cannot guarantee that the application to the Luxembourg Stock Exchange will be approved, and settlement of the global bonds is not conditional on obtaining the listing.

The issue and sale of the global bonds were authorized by the Full Powers signed by the President of the Republic on January 15, 2021. The Monetary Board of the Republic issued its approval-in-principle for the offering of the global bonds on December 10, 2020. The offering remains subject to certain additional approvals of the Monetary Board.

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Book Entry

The Republic will issue the global bonds in the form of fully registered global securities. The Republic will deposit the global securities with, and register the global securities in the name of the common depositary for Euroclear and Clearstream or its nominee. Upon the issuance of the global securities for the global bonds, the common depositary for Euroclear and Clearstream will credit, on its internal system, the respective principal amounts of the individual beneficial interests represented by such global securities to the accounts of persons who have accounts with Euroclear and Clearstream. Such accounts initially will be designated by or on behalf of the underwriters. Ownership of beneficial interests in a global security for the global bonds will be limited to persons who have accounts with Euroclear and Clearstream (“Euroclear/Clearstream participants”) or persons who hold interests through Euroclear/Clearstream participants.

Ownership of beneficial interests in a global security will be shown on, and transfers of that ownership will be effected only through, records maintained by Euroclear and Clearstream or its nominee (with respect to interests of Euroclear /Clearstream participants) and the records of agent members (with respect to interests of persons other than Euroclear/Clearstream participants).

So long as the common depositary for Euroclear and Clearstream or its nominee is the holder of a global security for the global bonds, the common depositary for Euroclear and Clearstream or its nominee, as the case may be, will be considered the holder of the global bonds represented by such global security for all purposes under the fiscal agency agreement and the global bonds. No beneficial owner of an interest in a global security will be able to transfer that interest except in accordance with Euroclear and Clearstream’s applicable procedures (in addition to those under the global bonds referred to in this prospectus supplement) unless the Republic issues certificated securities as described under “—Certificated Securities” below.

Investors may hold their interests in the global securities directly through Euroclear and Clearstream, if they are Euroclear/Clearstream participants, or indirectly through organizations that are Euroclear/Clearstream participants.

Payments of the principal of and interest on the global securities will be made to the common depositary for Euroclear and Clearstream or its nominee, as the holder of such global securities. None of the Republic, the underwriters or the fiscal agent will have any responsibility or liability for any aspect of the records relating to or payments made to an account of beneficial ownership interests in the global securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

The Republic expects that the common depositary for Euroclear and Clearstream or its nominee, upon receipt of any payment of principal of or interest on a global security held by the common depositary for Euroclear and Clearstream or its nominee, will immediately credit Euroclear/Clearstream participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global security as shown on the records of the common depositary for Euroclear and Clearstream or its nominee. The Republic also expects that payments by Euroclear/Clearstream participants to owners of beneficial interests in such global security held through such Euroclear/Clearstream participants will be governed by standing instructions and customary practices. Such payments will be the responsibility of such Euroclear/Clearstream participants.

Certificated Securities

In circumstances detailed in the accompanying prospectus (see “Description of the Securities—Description of the Debt Securities—Global Securities—Registered Ownership of the Global Security”), the Republic could issue certificated securities. The Republic will only issue certificated securities in fully registered form in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. The holders of certificated securities shall present directly at the corporate trust office of the fiscal agent, at the office of the

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Luxembourg paying and transfer agent or at the office of any other transfer agent as the Republic may designate from time to time all requests for the registration of any transfer of such securities, for the exchange of such securities for one or more new certificated securities in a like aggregate principal amount and in authorized denominations and for the replacement of such securities in the cases of mutilation, destruction, loss or theft. Certificated securities issued as a result of any partial or whole transfer, exchange or replacement of the global bonds will be delivered to the holder at the corporate trust office of the fiscal agent, at the office of the Luxembourg paying and transfer agent or at the office of any other transfer agent, or (at the risk of the holder) sent by mail to such address as is specified by the holder in the holder’s request for transfer, exchange or replacement.

Registration and Payments

The Republic will pay the principal amount of a global bond on its maturity date in Euros by transfer to a Euro account (or any other account to which Euros may be credited or transferred) specified by the payee. If payments cannot be effected by electronic credit or transfer, then payment will be by Euro cheque. Payments will be made upon presentation of the global bond at the office of the fiscal agent or, subject to applicable law and regulations, at the office of any paying agent, including the Luxembourg paying agent (if the global bonds are listed on the Euro MTF and the rules of the Luxembourg Stock Exchange so require).

In addition to the fiscal agent, the Republic will appoint The Bank of New York Mellon, London Branch as paying agent in the City of London, England of the global bonds and The Bank of New York Mellon SA/NV, Luxembourg Branch as registrar and transfer agent of the global bonds.

If the global bonds are accepted for listing on the Euro MTF, and the rules of the Luxembourg Stock Exchange so require, the Republic will appoint and maintain a Luxembourg paying and transfer agent, which shall initially be The Bank of New York Mellon SA/NV, Luxembourg Branch. Payments and transfers with respect to the global bonds may be effected through the Luxembourg paying and transfer agent, which will be executed through Euroclear and Clearstream, Luxembourg. Holders of certificated global bonds may present such securities for registration of transfer or payment at the office of the Luxembourg paying and transfer agent. Forms of the transfer notice (or other instrument of transfer) are available, and duly completed transfer notices (or other instrument of transfer) may be submitted, at the office of the Luxembourg paying and transfer agent. For so long as the global bonds are listed on the Euro MTF, the Republic will publish any change as to the identity of the Luxembourg paying and transfer agent in a leading newspaper in Luxembourg, which is expected to be the Luxemburger Wort, or on the website of the Luxembourg Stock Exchange at www.bourse.lu.

Redemption and Sinking Fund

The Republic may not redeem the global bonds prior to maturity. The Republic will not provide a sinking fund for the amortization and retirement of the global bonds.

Regarding the Fiscal Agent

The fiscal agent has its principal corporate trust office at 240 Greenwich Street, New York, New York 10286. The Republic will at all times maintain a paying agent and a transfer agent in the City of New York which will, unless otherwise provided, be the fiscal agent. The Republic may maintain deposit accounts and conduct other banking transactions in the ordinary course of business with the fiscal agent. The fiscal agent will be the agent of the Republic, not a trustee for holders of any global bonds. Accordingly, the fiscal agent will not have the same responsibilities or duties to act for such holders as would a trustee, except that all funds held by the fiscal agent, the London paying agent or the Luxembourg paying and transfer agent for the payment of principal, and premium, if any, or interest on the global bonds shall be held by such agent in trust for the holders of the global bonds. None of the fiscal agent, the London paying agent or the Luxembourg paying and transfer agent will have any responsibility or liability in relation to payments of principal and interest.

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The fiscal agency agreement and the supplements to the fiscal agency agreement are not required to be qualified under the Trust Indenture Act of 1939 (the “Trust Indenture Act”). Accordingly, the fiscal agency agreement and the supplements to the fiscal agency agreement may not contain all of the provisions which could be beneficial to holders of the global bonds which would be contained in an indenture qualified under the Trust Indenture Act.

Notices

All notices will be mailed to the registered holders of the global bonds. So long as the common depositary for Euroclear and Clearstream or its nominee is the registered holder of the global bonds, each beneficial holder must rely on the procedures of Euroclear and Clearstream and participants to receive notice, subject to any statutory or regulatory requirements. Notices may also be published on the website of the Luxembourg Stock Exchange at www.bourse.lu.

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GLOBAL CLEARANCE AND SETTLEMENT

The Republic has obtained the information in this section from sources it believes to be reliable, including from Euroclear and Clearstream, Luxembourg, and the Republic takes responsibility for the accurate reproduction of this information. The Republic takes no responsibility, however, for the accuracy of this information. Although Euroclear and Clearstream, Luxembourg have agreed to the procedures provided below to facilitate transfers of global bonds among participants of Euroclear and Clearstream, Luxembourg, they are under no obligation to perform such procedures. In addition, such procedures may be modified or discontinued at any time. None of the Republic, the fiscal agent, the London paying agent or the Luxembourg paying and transfer agent will have any responsibility for the performance by Euroclear or Clearstream, Luxembourg or their respective participants or indirect participants of the respective obligations under the rules and procedures governing their operations.

The Clearing Systems

Euroclear and Clearstream, Luxembourg hold securities for their participants and facilitate the clearance and settlement of securities transactions between their participants through electronic book-entry settlement in their accounts. Euroclear and Clearstream, Luxembourg provide various services to their participants, including the safekeeping, administration, clearance and settlement and lending and borrowing of internationally traded securities. Euroclear and Clearstream, Luxembourg participants are financial institutions such as underwriters, securities brokers and dealers, banks, trust companies and other organizations. Other banks, brokers, dealers and trust companies have indirect access to Euroclear or Clearstream, Luxembourg by clearing through or maintaining a custodial relationship with a Euroclear or Clearstream, Luxembourg participant.

Initial Settlement

Investors holding their interests in the securities through Euroclear or Clearstream, Luxembourg, will follow the settlement procedures applicable to conventional Eurobonds in registered form. If you are an investor on the settlement date, you will pay for the global bonds by wire transfer and the entity through which you hold your interests in the global bonds will credit your securities custody account.

Secondary Market Trading

Euroclear and Clearstream, Luxembourg participants will transfer interests in the securities among themselves in the ordinary way according to the rules and operating procedures of Euroclear and Clearstream, Luxembourg governing conventional Eurobonds. Participants will pay for these transfers by wire transfer.

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TAXATION

General

The Republic urges you to consult your own tax advisors to determine your particular tax consequences in respect of participating in the offering, and of owning and selling the global bonds.

Philippine Taxation

The following is a summary of certain Philippine tax consequences that may be relevant to non-Philippine holders of the global bonds in connection with the holding and disposition of the global bonds. The Republic uses the term “non-Philippine holders” to refer to (i) non-residents of the Philippines who are neither citizens of the Philippines nor are engaged in trade or business within the Philippines and (ii) non-Philippine corporations not engaged in trade or business in the Philippines. If you are not a non-Philippine holder, you should consult your tax advisor about the consequences of holding the global bonds.

This summary is based on Philippine laws, rules, and regulations in effect as of the date hereof, all of which are subject to change and may apply retroactively. It is not intended to constitute a complete analysis of the tax consequences under Philippine law regarding the receipt, ownership, or disposition of the global bonds, in each case by non-Philippine holders, nor to describe any of the tax consequences that may be applicable to residents of the Republic or to non-Philippine holders.

Effect of Holding Global Bonds. Payments by the Republic of principal of and interest on the global bonds to a non-Philippine holder will not subject such non-Philippine holder to taxation in the Philippines by reason solely of the holding of the global bonds or the receipt of principal or interest in respect thereof.

Taxation of Interest on the Global Bonds. When the Republic makes payments of principal and interest to you on the global bonds, no amount will be withheld from such payments for, or on account of, any taxes of any kind imposed, levied, withheld or assessed by the Philippines or any political subdivision or taxing authority thereof or therein.

Taxation of Capital Gains. Non-Philippine holders of the global bonds will not be subject to Philippine income or withholding tax in connection with the sale, exchange, or retirement of a global bond if such sale, exchange or retirement is made outside the Philippines or an exemption is available under an applicable tax treaty in force between the Philippines and the country of domicile of the non-Philippine holder. If the global bonds have a maturity of more than five years from the date of issuance, any gains realized by a holder of the debt security will not, under the Philippine Tax Code, be subject to Philippine income tax.

Documentary Stamp Taxes. No documentary stamp tax is imposed upon the transfer of the global bonds. A documentary stamp tax, at the rate of ₱1.50 for every ₱200.00 of the issue value of the global bonds, is payable upon the issuance of the global bonds and will be for the account of the Republic.

Estate and Donor’s Taxes. The transfer of a global bond by way of succession upon the death of a non-Philippine holder will generally be subject to Philippine estate tax at the rate of 6% based on the value of such net estate.

The transfer of a global bond by gift to an individual, whether or not related to the non-Philippine holder, will generally be subject to a Philippine donor’s tax at the rate of 6% based on the total gifts in excess of P250,000 made during the calendar year.

The foregoing apply even if the holder is a non-Philippine holder. However, the Republic will not collect estate and donor’s taxes on the transfer of the global bonds by gift or succession if the deceased at the time of

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death, or the donor at the time of donation, was a citizen and resident of a foreign country that provides certain reciprocal rights to citizens of the Philippines (a “Reciprocating Jurisdiction”). For these purposes, a Reciprocating Jurisdiction is a foreign country which at the time of death or donation (i) did not impose a transfer tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country or (ii) allowed a similar exemption from transfer or death taxes of every character or description in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country.

Certain U.S. Federal Income Tax Considerations

The following is a summary of certain U.S. federal income tax consequences of the acquisition, ownership and disposition of the global bonds by a U.S. Holder (as defined below). This summary deals only with initial purchasers of the global bonds at the “issue price” (the first price at which a substantial amount of global bonds are sold for money, excluding sales to underwriters, placement agents or wholesalers) in the initial offering that are U.S. Holders that will hold the global bonds as capital assets. The discussion does not cover all aspects of U.S. federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership or disposition of the global bonds by particular investors, and does not address state, local, non-U.S. or other tax laws. This summary also does not discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as financial institutions, insurance companies, investors liable for the alternative minimum tax or the Medicare tax on net investment income, individual retirement accounts and other tax-deferred accounts, tax-exempt organizations, dealers in securities or currencies, investors that will hold the global bonds as part of straddles, hedging transactions or conversion transactions for U.S. federal income tax purposes, persons that have ceased to be U.S. citizens or lawful permanent residents of the United States, investors holding the global bonds in connection with a trade or business conducted outside of the United States, U.S. citizens or lawful permanent residents living abroad or investors whose functional currency is not the U.S. dollar). In addition, this summary does not address tax consequences attributable to the requirement under Section 451(b) of the Internal Revenue Code of 1986, as amended (the “Code”) that accrual method taxpayers recognize certain amounts of income no later than the time such amounts are included in income on applicable financial statements.

As used herein, the term “U.S. Holder” means a beneficial owner of the global bonds that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organized under the laws of the United States or any state thereof (or the District of Columbia), (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or the trust has validly elected to be treated as a domestic trust for U.S. federal income tax purposes.

The U.S. federal income tax treatment of a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds the global bonds will depend on the status of the partner and the activities of the partnership. Prospective purchasers that are entities or arrangements treated as partnerships for U.S. federal income tax purposes should consult their tax advisors concerning the U.S. federal income tax consequences to them and their partners of the acquisition, ownership and disposition of the global bonds by the partnership.

This summary is based on the tax laws of the United States, including the Code, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect.

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED TO BE RELIED UPON BY

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PURCHASERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE CODE. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING, AND DISPOSING THE GLOBAL BONDS, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.

Payments of Interest

Interest on a global bond will be taxable to a U.S. Holder as ordinary interest income at the time it is received or accrued, depending on such holder’s method of accounting for U.S. federal income tax purposes. Interest paid by the Republic on the global bonds constitutes income from sources outside the United States. Prospective purchasers should consult their tax advisors concerning the applicability of the foreign tax credit and source of income rules to income attributable to the global bonds.

The amount of income recognized by a cash basis U.S. Holder with respect to an interest payment denominated in Euros will be the U.S. dollar value of the interest payment, based on the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars.

An accrual basis U.S. Holder may determine the amount of income recognized with respect to an interest payment denominated in Euros in accordance with either of two methods. Under the first method, the amount of income accrued will be based on the average exchange rate in effect during the interest accrual period (or, in the case of an accrual period that spans two taxable years of a U.S. Holder, the part of the period within each taxable year). Under the second method, the U.S. Holder may elect to determine the amount of income accrued on the basis of the exchange rate in effect on the last day of the accrual period (or, in the case of an accrual period that spans two taxable years, the exchange rate in effect on the last day of the part of the period within each taxable year). Additionally, if a payment of interest is actually received within five business days of the last day of the accrual period, an electing accrual basis U.S. Holder may instead translate the accrued interest into U.S. dollars at the exchange rate in effect on the day of actual receipt. Any such election will apply to all debt instruments held by the U.S. Holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the U.S. Holder, and will be irrevocable without the consent of the U.S. Internal Revenue Service (the “IRS”). Upon receipt of the interest payment (including a payment attributable to accrued but unpaid interest upon the sale or retirement of a Note) denominated in Euros, the accrual basis U.S. Holder may recognize U.S. source exchange gain or loss (taxable as U.S.-source ordinary income or loss) equal to the difference between the amount received (translated into U.S. dollars at the spot rate on the date of receipt) and the amount previously accrued, regardless of whether the payment is in fact converted into U.S. dollars.

Sale or Retirement of the Global Bonds

A U.S. Holder will generally recognize gain or loss on the sale or retirement of a global bond equal to the difference between the amount realized on such sale or retirement and the U.S. Holder’s adjusted tax basis in a global bond, in each case as determined in U.S. dollars. A U.S. Holder’s adjusted tax basis in a global bond will generally be its U.S. dollar cost. The amount realized does not include the amount attributable to accrued but unpaid interest, which will be taxable as ordinary interest income according to the rules described in “Certain U.S. Federal Income Tax Considerations — Payments of Interest” above to the extent not previously included in income. U.S. Holders should consult their own tax advisors about how to translate or otherwise account for the amount realized on the sale or retirement of global bonds that are not paid in U.S. dollars.

A U.S. Holder will recognize U.S. source exchange gain or loss (taxable as ordinary income or loss) on the sale or retirement of a global bond equal to the difference, if any, between the U.S. dollar values of the

U.S. Holder’s purchase price for the global bond (i) on the date of sale or retirement and (ii) the date on which the U.S. Holder acquired the global bond. Any such exchange gain or loss (including any exchange gain or loss with respect to the receipt of accrued but unpaid stated interest) will be realized only to the extent of total gain or loss realized on the sale or retirement.

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Except to the extent attributable to changes in exchange rates, gain or loss recognized by a U.S. Holder on the sale or retirement of a global bond will be capital gain or loss and will be long-term capital gain or loss if the global bond was held by the U.S. Holder for more than one year. The deductibility of capital losses is subject to limitations.

Gain or loss realized by a U.S. Holder on the sale or retirement of a global bond generally will be U.S. source. Prospective purchasers should consult their tax advisors as to the foreign tax credit implications of the sale or retirement of global bonds.

Backup Withholding and Information Reporting

Payments of principal and interest on, and the proceeds of sale or retirement of global bonds by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable regulations. Backup withholding may apply to these payments if the U.S. Holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to comply with applicable certification requirements. Certain U.S. Holders are not subject to backup withholding. U.S. Holders should consult their tax advisors about these rules and any other reporting obligations that may apply to the ownership or disposition of global bonds, including requirements related to the holding of certain foreign financial assets.

A holder that is not a U.S. Holder may be required to comply with certification and identification procedures in order to establish its exemption from information reporting and backup withholding.

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UNDERWRITING

Subject to the terms and conditions contained in an underwriting agreement, which consists of a terms agreement dated , 2021 and the underwriting agreement standard terms filed as an exhibit to the registration statement, the Republic has agreed to sell to the underwriters, namely BNP Paribas, Credit Suisse Securities (Europe) Limited, Goldman Sachs (Asia) L.L.C., J.P. Morgan Securities plc, Nomura International (Hong Kong) Limited and Standard Chartered Bank, and the underwriters have agreed to purchase from the Republic, 20 global bonds in the principal amount of € , 20 global bonds in the principal amount of € and 20 global bonds in the principal amount of € . Each of the underwriters, severally and not jointly, has agreed to purchase from the Republic, the principal amounts of the global bonds listed opposite its name below.

Principal
Amount

Underwriters

20 global
bonds

BNP Paribas

€

16, Boulevard des Italiens

75009 Paris

France

Credit Suisse Securities (Europe) Limited

€

One Cabot Square

London E14 4QJ

United Kingdom

Goldman Sachs (Asia) L.L.C.

€

68th Floor, Cheung Kong Center

2 Queens Road, Central

Hong Kong

J.P. Morgan Securities plc

€

25 Bank Street

Canary Wharf

London, E14 5JP

United Kingdom

Nomura International (Hong Kong) Limited

€

30th Floor, Two International Finance Center

8 Finance Street, Central

Hong Kong

Standard Chartered Bank

€

One Basinghall Avenue

London EC2V 5DD

United Kingdom

Total

€

The underwriting agreement provides that the underwriters are obligated to purchase all of the global bonds if any are purchased. The underwriting agreement also provides that if an underwriter defaults, the purchase commitment of the non-defaulting underwriters may be increased or the offering of the global bonds may be terminated. The underwriters may offer and sell the global bonds through certain of their respective affiliates.

The Republic has agreed to indemnify the underwriters against liabilities under the Securities Act of 1933 or contribute to payments which the underwriters may be required to make in that respect.

The Republic estimates that its out-of-pocket expenses for this offering will be approximately $ . The underwriters have agreed to reimburse the Republic for certain of its expenses.

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The underwriters have advised the Republic that they propose to offer the global bonds to the public initially at the public offering price that appears on the cover page of this prospectus supplement. After the initial public offering, the underwriters may change the public offering price and any other selling terms.

In connection with this offering of the global bonds, the underwriters may engage in overallotment, stabilizing transactions and syndicate covering transactions in accordance with Regulation M under the Exchange Act. Overallotment involves sales in excess of the offering size, which create a short position for the underwriters. Stabilizing transactions involve bids to purchase the global bonds in the open market for the purpose of pegging, fixing or maintaining the price of the global bonds. Syndicate covering transactions involve purchases of the global bonds in the open market after the distribution has been completed in order to cover short positions. Stabilizing transactions and syndicate covering transactions may cause the price of the global bonds to be higher than it would otherwise be in the absence of those transactions. If the underwriters engage in stabilizing or syndicate covering transactions, they may discontinue them at any time. The Republic has been advised by the underwriters that they intend to make a market in the global bonds, but the underwriters are not obligated to do so and may discontinue any market-making activities at any time without notice. No assurance can be given as to the liquidity of or the trading market for the global bonds.

Separate from the purchase of the global bonds made with a view to distribution, the underwriters or certain of their affiliates may also purchase the global bonds and be allocated the global bonds for asset management or proprietary purposes. The underwriters or their respective affiliates may purchase the global bonds for their own account and enter into transactions, including credit derivatives, such as asset swaps, repackaging and credit default swaps relating to the global bonds or other securities of the Republic; these purchases may be made pursuant to the underwriting agreement or in secondary market transactions. These transactions would be carried out as bilateral trades with selected counterparties and separately from any existing sale or resale of the global bonds to which this prospectus supplement relates (notwithstanding that such selected counterparties may also be purchasers of the global bonds).

Settlement and Delivery

The Republic expects that delivery of the global bonds will be made against payment therefor on or about the settlement date specified on the cover page of this prospectus supplement, which will be the business day following the date of pricing of the global bonds. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to a trade expressly agree otherwise. Accordingly, purchasers who wish to trade global bonds prior to the delivery of the global bonds will be required, by virtue of the fact that the global bonds initially will settle in T+ , to specify alternative settlement arrangements to prevent a failed settlement.

Relationship of Underwriters with the Republic

The underwriters have in the past and may in the future provide investment and commercial banking and other related services to the Republic in the ordinary course of business for which the underwriters and/or their respective affiliates have received or may receive customary fees and reimbursement of out of pocket expenses.

Selling Restrictions

MIFID II Product Governance / Professional Investors and ECPs Only Target Market

Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the global bonds has led to the conclusion that: (i) the target market for the global bonds is eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, “MiFID II”); and (ii) all channels for distribution of the global bonds to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the global bonds (a “distributor”)

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should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the global bonds (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.

UK MIFIR Product Governance/Professional Investors and ECPs Only Target Market

Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the global bonds has led to the conclusion that: (i) the target market for the global bonds is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (“COBS”), and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“UK MiFIR”); and (ii) all channels for distribution of the global bonds to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the global bonds (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) is responsible for undertaking its own target market assessment in respect of the global bonds (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.

PRIIPS Regulation/Prospectus Regulation/Prohibition of Sales to European Economic Area Retail Investors

The global bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the global bonds or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation. This prospectus supplement and the accompanying prospectus have been prepared on the basis that any offer of notes in any Member State of the EEA will be made pursuant to an exemption under Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”) from the requirement to publish a prospectus for offers of notes. Each of this prospectus supplement and the accompanying prospectus is not a prospectus for the purposes of the Prospectus Regulation.

The above selling restriction is in addition to any other selling restrictions set out in this prospectus supplement and the accompanying prospectus.

Hong Kong

Each underwriter has represented and agreed that:

(a) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any global bonds other than (i) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”) and any rules made under the SFO; or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”) or which do not constitute an offer to the public within the meaning of the C(WUMP)O; and

(b) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or

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document relating to the global bonds, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to global bonds which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made thereunder.

Japan

The global bonds have not been and will not be registered under the Financial Instruments and Exchange Law of Japan. Each underwriter has represented, warranted and agreed that it has not directly or indirectly offered or sold and will not offer or sell any global bonds, directly or indirectly, in Japan or to, or for the benefit of, any Japanese person or to others, for re-offering or resale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

Korea

Each underwriter has represented and agreed that (i) it has not offered, sold or delivered and will not offer, sell or deliver, directly or indirectly, any global bonds in Korea or to, or for the account or benefit of, any resident of Korea, except as permitted by applicable Korean laws and regulations; and (ii) any securities dealer to whom it sells global bonds will agree that it will not offer any global bonds, directly or indirectly, in Korea or to any resident of Korea, except as permitted by applicable Korean laws and regulations, or to any dealer who does not so represent and agree.

Luxembourg

The global bonds may not be offered or sold to the public in the Grand Duchy of Luxembourg, directly or indirectly, and, neither this prospectus supplement and the accompanying prospectus nor any other circular, prospectus, form of application, advertisement, communication or other material may be distributed, or otherwise made available in, or from or published in, the Grand Duchy of Luxembourg, except for the sole purpose of the admission to trading of the global bonds on the Euro MTF of the Luxembourg Stock Exchange and listing on the official list of the Luxembourg Stock Exchange, and except in circumstances which do not constitute an offer of securities to the public.

People’s Republic of China

The global bonds are not being offered or sold and may not be offered or sold, directly or indirectly, in the People’s Republic of China (for such purposes, not including the Hong Kong and Macau Special Administrative Regions or Taiwan), except as permitted by the securities laws of the People’s Republic of China.

Philippines

The global bonds constitute exempt securities within the meaning of the Philippine Securities Regulation Code and is implementing regulations. As such, the global bonds, are not required to be registered under the provisions thereof before they can be sold or offered for sale or distribution in the Philippines. However, the global bonds may be sold or offered for sale in the Philippines only by underwriters, dealers or brokers duly licensed by the Philippine Securities and Exchange Commission.

Singapore

This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement and the accompanying prospectus

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and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the global bonds may not be circulated or distributed, nor may the global bonds be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined in Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”)), (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the global bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

the securities or securities-based derivative contracts (each as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the global bonds pursuant to an offer made under Section 275 of the SFA except:

(1) to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

(2) where no consideration is or will be given for the transfer;

(3) where the transfer is by operation of law;

(4) as specified in Section 276(7) of the SFA; or

(5) as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

Switzerland

This prospectus supplement and the accompanying prospectus are not intended to constitute an offer or solicitation to purchase or invest in the global bonds. The global bonds may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act (the “FinSA”) and no application has or will be made to admit the global bonds to trading on any trading venue (exchange or multilateral trading facility) in Switzerland. None of this prospectus supplement and the accompanying prospectus or any other offering or marketing material relating to the global bonds constitutes a prospectus pursuant to the FinSA, and none of this prospectus supplement and the accompanying prospectus or any other offering or marketing material relating to the global bonds may be publicly distributed or otherwise made publicly available in Switzerland.

Taiwan

The offer and sale of the global bonds have not been and will not be registered with the Financial Supervisory Commission of Taiwan, China (“Taiwan”) pursuant to relevant securities laws and regulations in Taiwan and may not be sold, issued or offered within Taiwan through a public offering or in a circumstance which constitutes an offer within the meaning of the Taiwan Securities and Exchange Law that requires a registration or approval of the Taiwan Financial Supervisory Commission. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the global bonds in Taiwan.

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United Arab Emirates

The global bonds have not been and will not be offered, sold or publicly promoted or advertised by it in the United Arab Emirates (the “UAE”) other than in compliance with any laws applicable in the UAE governing the issue, offering and sale of securities.

United Kingdom

The global bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the “FSMA”) and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of United Kingdom domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of United Kingdom domestic law by virtue of the EUWA (as amended, the “UK PRIIPs Regulation”) for offering or selling the global bonds or otherwise making them available to retail investors in the United Kingdom has been prepared and therefore offering or selling the global bonds or otherwise making them available to any retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.

This prospectus supplement and the accompanying prospectus have been prepared on the basis that any offer of the global bonds in the United Kingdom will be made pursuant to an exemption under Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA (the “U.K. Prospectus Regulation”) from a requirement to publish a prospectus for offers of notes. This prospectus supplement and the accompanying prospectus are not a prospectus for the purpose of the U.K. Prospectus Regulation.

Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the global bonds may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to the Republic.

All applicable provisions of the FSMA must be complied with in respect to anything done by any person in relation to the global bonds in, from or otherwise involving the United Kingdom.

LEGAL MATTERS

The validity of the global bonds will be passed upon on behalf of the Republic as to Philippine law by the Secretary of the Department of Justice of the Republic, and as to U.S. federal and New York State law by Linklaters Singapore Pte. Ltd., special United States counsel for the Republic. Certain matters will be passed upon for the underwriters by Cleary Gottlieb Steen & Hamilton (Hong Kong), special United States counsel for the underwriters, as to matters of U.S. federal and New York State law, and by Romulo, Mabanta, Buenaventura, Sayoc & de los Angeles, Philippine counsel for the underwriters, as to matters of Philippine law.

GENERAL INFORMATION

1. The 20 global bonds, the 20 global bonds and the 20 global bonds have been accepted for clearance through Euroclear and Clearstream, Luxembourg. With respect to the 20 global bonds, the

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International Securities Identification Number is , and the Common Code number is . With respect to the 20 global bonds, the International Securities Identification Number is , and the Common Code number is . With respect to the 20 global bonds, the International Securities Identification Number is , and the Common Code number is . The legal entity identifier code of the Republic is 529900RAHBALMYIJ3T08.

2. The issue and sale of the global bonds was authorized by the Full Powers signed by the President of the Republic on January 15, 2021.

3. Except as disclosed in this prospectus supplement and the accompanying prospectus, there has been no material adverse change in the fiscal condition or affairs of the Republic which is material in the context of the global bond offering since November 20, 2020.

4. Application will be made to list the global bonds on the Euro MTF. Copies of the following documents will, so long as any global bonds are listed on the Euro MTF, be available for inspection during usual business hours at the specified office of The Bank of New York Mellon SA/NV, Luxembourg Branch:

•

copies of the registration statement, which includes the fiscal agency agreement and the form of the underwriting agreement as exhibits thereto; and

•

the Full Powers signed by the President of the Republic on January 15, 2021, and the approval-in-principle for the offer, issue and sale of the global bonds issued on December 10, 2020 by the Monetary Board of Bangko Sentral.

In addition, so long as the global bonds are outstanding or listed on the Euro MTF, copies of the Philippines’ economic reports for each year in English (as and when available) will be available at the offices of the listing agent in Luxembourg during normal business hours on any weekday. The underwriting agreement, if any, and the fiscal agency agreement shall also be available free of charge at the office of the listing agent and the Luxembourg paying and transfer agent. In addition, this prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein will be available free of charge at the office of the listing agent in Luxembourg and on the Luxembourg Stock Exchange’s web site. Application will be made to admit the global bonds to listing on the Official List of the Luxembourg Stock Exchange and to trading on the Euro MTF.

5. The Bank of New York Mellon SA/NV, Luxembourg Branch has been appointed as the Luxembourg paying and transfer agent. For so long as the global bonds are listed on the Euro MTF and the rules of the Luxembourg Stock Exchange so require, the Republic will maintain a Luxembourg paying and transfer agent.

WHERE YOU CAN FIND MORE INFORMATION

The Republic has filed registration statements relating to its global bonds, including the global bonds offered by this prospectus supplement, and warrants with the SEC under the U.S. Securities Act of 1933, as amended. Neither this prospectus supplement nor the accompanying prospectus contains all of the information described in the registration statements. For further information, you should refer to the registration statements, including the documents incorporated by reference in the registration statements.

You can request copies of the registration statements, including its various exhibits, upon payment of a duplicating fee, by writing to the SEC. You may also read and copy these documents at the SEC’s public reference room in Washington D.C.:

SEC Public Reference Room

100 F Street, N.E.

Washington, D.C. 20549

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Please call the SEC at 1-800-SEC-0330 for further information. These documents are also available to the public for free from the SEC’s web site at http://www.sec.gov.

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES

The authorized agent of the Republic in the United States is Elmer G. Cato, Consul General, the Philippine Consulate General, 556 Fifth Avenue, New York, New York 10036-5095.

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LOGO

Republic of the Philippines

Debt Securities and/or Warrants

The Republic of the Philippines (the “Republic”) may from time to time offer and sell its debt securities and warrants in amounts, at prices and on terms to be determined at the time of sale and provided in one or more supplements to this prospectus. The Republic may also offer debt securities in exchange for other debt securities or that are convertible into new debt securities. The Republic may offer securities with an aggregate principal amount of up to US$5,488,992,320 (or the equivalent in other currencies) in the United States. The Republic will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest. This prospectus may not be used to offer or sell securities unless accompanied by a supplement. The Republic may sell the securities directly, through agents designated from time to time or through underwriters. The names of any agents or underwriters will be provided in the applicable prospectus supplement.

You should not assume that information in this prospectus, any prospectus supplement or any document incorporated by reference in them is accurate as of any date other than its date.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus is dated November 20, 2020.

TABLE OF CONTENTS


	Page

ABOUT THIS PROSPECTUS		2

FORWARD-LOOKING STATEMENTS		3

DATA DISSEMINATION		4

USE OF PROCEEDS		5

RATINGS		6

DESCRIPTION OF THE SECURITIES		7

Description of the Debt Securities		7

Description of the Warrants		16

Limitations on Issuance of Bearer Debt Securities		17

Ranking Provisions of the Debt Securities		18

COLLECTIVE ACTION SECURITIES		19

TAXATION		25

PLAN OF DISTRIBUTION		35

VALIDITY OF THE SECURITIES		37

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES		38

EXPERTS; OFFICIAL STATEMENTS AND DOCUMENTS		39

FURTHER INFORMATION		40

ABOUT THIS PROSPECTUS

This prospectus provides you with a general description of the securities the Republic may offer under the “shelf” registration statement it has filed with the Securities and Exchange Commission (the “SEC”). Each time the Republic sells securities covered by this prospectus, it will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. If the information in this prospectus differs from any prospectus supplement, you should rely on the information contained in the prospectus supplement. You should read both this prospectus and the accompanying prospectus supplement, together with additional information described below under the heading “Further Information.”

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus under “Republic of the Philippines” are forward looking. They include statements concerning, among others:

•

the Republic’s economic, business and political conditions and prospects;

•

the Republic’s financial stability;

•

the depreciation or appreciation of the peso;

•

changes in interest rates; and

•

governmental, statutory, regulatory or administrative initiatives.

Actual results may differ materially from those suggested by the forward-looking statements due to various factors. These factors include, but are not limited to:

•

adverse external factors, such as high international interest rates and recession or low growth in the economies of the Republic’s trading partners. High international interest rates could increase the Republic’s current account deficit and budgetary expenditures. Recession or low growth in the economies of the Republic’s trading partners could lead to fewer exports from the Republic and, indirectly, lower growth in the Republic;

•

instability or volatility in the international financial markets. This could lead to domestic volatility, making it more difficult for the Government to achieve its macroeconomic goals. This could also lead to declines in foreign direct and portfolio investment inflows;

•

adverse domestic factors, such as a decline in domestic savings and investment, increases in domestic inflation, high domestic interest rates and exchange rate volatility. Each of these factors could lead to lower growth or lower international reserves; and

•

other adverse factors, such as climatic or seismic events, the outbreak of diseases such as COVID-19, African swine flu, severe acute respiratory syndrome, middle east respiratory syndrome and avian influenza and political uncertainty.

DATA DISSEMINATION

The Republic is a subscriber to the IMF’s Special Data Dissemination Standard (“SDDS”), which is designed to improve the timeliness and quality of information of subscribing member countries. The SDDS requires subscribing member countries to provide schedules indicating, in advance, the date on which data will be released or the so-called “Advance Release Calendar.” For the Republic, precise dates or “no-later-than dates” for the release of data under the SDDS are disseminated three months in advance through the Advance Release Calendar, which is published on the Internet under the IMF’s Dissemination Standards Bulletin Board. Summary methodologies of all metadata to enhance transparency of statistical compilation are also provided on the Internet under the Dissemination Standards Bulletin Board. The Internet website for the Republic’s Advance Release Calendar and metadata is located at http://dsbb.imf.org/Pages/SDDS/CtyCtgList.aspx?ctycode=PHL.

USE OF PROCEEDS

Unless otherwise specified in the applicable prospectus supplement, the net proceeds from sales of securities will be used for the general purposes of the Republic, including for budget support and to repay a portion of the Government’s borrowings.

RATINGS

Ratings included herein are not a recommendation to purchase, hold or sell securities and may be changed, suspended or withdrawn at any time. The Republic’s current credit ratings and rating outlooks are dependent upon economic conditions and other factors affecting credit risk that are outside the control of the Republic. Each rating should be evaluated independently of the others. Detailed explanations of the ratings may be obtained from the rating agencies. The Republic discloses these ratings because, though the Republic has no control over ratings, they are important to the Republic’s ability to obtain the financing that it needs on terms that are favorable to it. A decision by a rating agency to downgrade the Republic’s credit rating may have an adverse impact on its ability to access funding and may increase its borrowing costs, while an upgrade in its rating may improve its access to funding and reduce its borrowing costs.

DESCRIPTION OF THE SECURITIES

Description of the Debt Securities

The Republic may issue debt securities in separate series at various times. Each series of the debt securities will be issued pursuant to a fiscal agency agreement (each, as applicable to a series of debt securities, the “Fiscal Agency Agreement”). The description below summarizes the material provisions of the debt securities that are common to all series and the Fiscal Agency Agreement. Since it is only a summary, the description may not contain all of the information that is important to you as a potential investor in the debt securities. Therefore, the Republic urges you to read the form of the Fiscal Agency Agreement and the form of the global bond before deciding whether to invest in the debt securities. The Republic has filed a copy of these documents with the Securities and Exchange Commission as exhibits to the registration statement of which this prospectus is a part. You should refer to such exhibits for more complete information.

The financial terms and other specific terms of your debt securities are described in the prospectus supplement relating to your debt securities. The description in the prospectus supplement will supplement this description or, to the extent inconsistent with this description, replace it.

You can find the definitions of certain capitalized terms in the subsection titled “Glossary of Certain Defined Terms” located at the end of this section.

General Terms of the Bonds

The prospectus supplement that relates to your debt securities will specify the following terms:

•

The aggregate principal amount and the designation;

•

The currency or currencies or composite currencies of denomination and payment;

•

Any limitation on principal amount and authorized denominations;

•

The percentage of their principal amount at which the debt securities will be issued;

•

The maturity date or dates;

•

The interest rate or rates, if any, for the debt securities and, if variable, the method by which the interest rate or rates will be calculated;

•

Whether any amount payable in respect of the debt securities will be determined based on an index or formula, and how any such amount will be determined;

•

The dates from which interest, if any, will accrue for payment of interest and the record dates for any such interest payments;

•

Where and how the Republic will pay principal and interest;

•

Whether and in what circumstances the debt securities may be redeemed before maturity;

•

Any sinking fund or similar provision;

•

Whether any part or all of the debt securities will be in the form of a global security and the circumstances in which a global security is exchangeable for certificated securities;

•

If issued in certificated form, whether the debt securities will be in bearer form with interest coupons, if any, or in registered form without interest coupons, or both forms, and any restrictions on exchanges from one form to the other; and

•

Whether the debt securities will be designated “Collective Action Securities” (as described below under “Collective Action Securities”).

If the Republic issues debt securities in bearer form, the prospectus supplement relating to the debt securities will also describe applicable U.S. federal income tax and other considerations additional to the disclosure in this prospectus.

Payments of Principal, Premium and Interest

On every payment date specified in the relevant prospectus supplement, the Republic will pay the principal, premium and/or interest due on that date to the registered holder of the relevant debt security at the close of business on the related record date. The record date will be specified in the applicable prospectus supplement. The Republic will make all payments at the place and in the currency set out in the prospectus supplement. Unless otherwise specified in the relevant prospectus supplement or the debt securities, the Republic will make payments in U.S. dollars at the New York office of the fiscal agent or, outside the United States, at the office of any paying agent. Unless otherwise specified in the applicable prospectus supplement, the Republic will pay interest by check, payable to the registered holder.

If the relevant debt security has joint holders, the check will be payable to all of them or to the person designated by the joint holders at least three business days before payment. The Republic will mail the check to the address of the registered holder in the bond register and, in the case of joint holders, to the address of the joint holder named first in the bond register.

The Republic will make any payment on debt securities in bearer form at the designated offices or agencies of the fiscal agent, or any other paying agent, outside of the United States. At the option of the holder of debt securities, the Republic will pay by check or by transfer to an account maintained by the payee with a bank located outside of the United States. The Republic will not make payments on bearer securities at the corporate trust office of the fiscal agent in the United States or at any other paying agency in the United States. In addition, the Republic will not make any payment by mail to an address in the United States or by transfer to an account with a bank in the United States. Nevertheless, the Republic will make payments on a bearer security denominated and payable in U.S. dollars at an office or agency in the United States if:

•

payment outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions; and

•

the payment is then permitted under United States law, without material adverse consequences to the Republic.

If the Republic issues bearer securities, it will designate the offices of at least one paying agent outside the United States as the location for payment.

Repayment of Funds; Prescription

If no one claims money paid by the Republic to the fiscal agent for the payment of principal or interest for two years after the payment was due and payable, the fiscal agent or paying agent will repay the money to the Republic. After such repayment, the fiscal agent or paying agent will not be liable with respect to the amounts so repaid. However, the Republic’s obligations to pay the principal of, and interest on, the debt securities as they become due will not be affected by such repayment.

You will not be permitted to submit a claim to the Republic for payment of principal or interest on any series of debt securities unless made within 10 years, in the case of principal, and five years, in the case of interest, from the date on which payment was due.

Global Securities

The prospectus supplement relating to a series of debt securities will indicate whether any of that series of debt securities will be represented by a global security. The prospectus supplement will also describe any unique

specific terms of the depositary arrangement with respect to that series. Unless otherwise specified in the prospectus supplement, the Republic anticipates that the following provisions will apply to depositary arrangements.

Registered Ownership of the Global Security

The global security will be registered in the name of a depositary identified in the prospectus supplement, or its nominee, and will be deposited with the depositary, its nominee or a custodian. The depositary, or its nominee, will therefore be considered the sole owner or holder of debt securities represented by the global security for all purposes under the Fiscal Agency Agreement. Except as specified below or in the applicable prospectus supplement, beneficial owners:

•

will not be entitled to have any of the debt securities represented by the global security registered in their names;

•

will not receive physical delivery of any debt securities in definitive form;

•

will not be considered the owners or holders of the debt securities;

•

must rely on the procedures of the depositary and, if applicable, any participants (institutions that have accounts with the depositary or a nominee of the depositary, such as securities brokers and dealers) to exercise any rights of a holder of the debt securities; and

•

will receive payments of principal and interest from the depositary or its participants rather than directly from the Republic.

The Republic understands that, under existing industry practice, the depositary and participants will allow beneficial owners to take all actions required of, and exercise all rights granted to, the registered holders of the debt securities.

The Republic will issue certificated securities and register debt securities in the name of a person other than the depositary or its nominee only if:

•

the depositary for a series of debt securities is unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Securities Exchange Act of 1934 and the Republic does not appoint a successor depositary within 90 days;

•

the Republic determines, in its sole discretion, not to have a series of debt securities represented by a global security; or

•

a default occurs that entitles the holders of the debt securities to accelerate the maturity date and such default has not been cured.

In these circumstances, an owner of a beneficial interest in a global security will be entitled to registration of a principal amount of debt securities equal to its beneficial interest in its name and to physical delivery of the debt securities in definitive form. Definitive debt securities in bearer form will not be issued in respect of a global security in registered form.

Beneficial Interests in and Payments on a Global Security

Only participants, and persons that may hold beneficial interests through participants, can own a beneficial interest in the global security. The depositary keeps records of the ownership and transfer of beneficial interests in the global security by its participants. In turn, participants keep records of the ownership and transfer of beneficial interests in the global security by other persons (such as their customers). No other records of the ownership and transfer of beneficial interests in the global security will be kept.

All payments on a global security will be made to the depositary or its nominee. When the depositary receives payment of principal or interest on the global security, the Republic expects the depositary to credit its participants’ accounts with amounts that correspond to their respective beneficial interests in the global security.

The Republic also expects that, after the participants’ accounts are credited, the participants will credit the accounts of the owners of beneficial interests in the global security with amounts that correspond to the owners’ respective beneficial interests in the global security.

The depositary and its participants establish policies and procedures governing payments, transfers, exchanges and other important matters that affect owners of beneficial interests in a global security. The depositary and its participants may change these policies and procedures from time to time. The Republic has no responsibility or liability for the records of ownership of beneficial interests in the global security, or for payments made or not made to owners of such beneficial interests. The Republic also has no responsibility or liability for any aspect of the relationship between the depositary and its participants or for any aspect of the relationship between participants and owners of beneficial interests in the global security.

Bearer Securities

The Republic may issue debt securities of a series in the form of one or more bearer global debt securities deposited with a common depositary for the Euroclear System and Clearstream Banking, S.A., or with a nominee identified in the applicable prospectus supplement. The specific terms and procedures, including the specific terms of the depositary arrangement, with respect to any portion of a series of debt securities to be represented by a bearer global security will be described in the applicable prospectus supplement.

Additional Amounts

The Republic will make all payments on the debt securities without withholding or deducting any present or future taxes imposed by the Republic or any of its political subdivisions, unless required by law. If Philippine law requires the Republic to deduct or withhold taxes, it will, except as discussed below, pay the holders of the debt securities such additional amounts as are necessary to ensure that they receive the same amount as they would have received without such withholding or deduction.

The Republic will not pay, however, any additional amounts if the holder of the debt securities is liable for Philippine tax because:

•

the holder of the debt securities is connected with the Republic other than by merely owning the debt security or receiving income or payments on the bond; or

•

the holder of the debt securities failed to comply with any reasonable certification, identification or other reporting requirement concerning the holder’s nationality, residence, identity or connection with the Republic, if compliance with such requirement is required by any statute or regulation of the Republic as a precondition to exemption from withholding or deduction of taxes; or

•

the holder of the debt securities failed to present its debt security for payment within 30 days of when the payment is due or when the Republic makes available to the holder of the debt securities or the relevant fiscal or paying agent a payment of principal or interest, whichever is later. Nevertheless, the Republic will pay additional amounts to the extent the holder would have been entitled to such amounts had it presented its debt security for payment on the last day of the 30 day period.

Status of Bonds

While outstanding, the debt securities will:

•

constitute direct, unconditional and unsecured obligations of the Republic;

•

rank without any preference among themselves and at least equally in right of payment with all of the Republic’s other unsecured and unsubordinated External Indebtedness, except as described below; and

•

continue to be backed by the full faith and credit of the Republic.

It is understood that this provision shall not be construed so as to require the Republic to make payments under the debt securities ratably with payments being made under any other external indebtedness of the Republic.

Under Philippine law, unsecured debt (including guarantees of debt) of a borrower in insolvency or liquidation that is documented by a public instrument, as provided in Article 2244(14) of the Civil Code of the Republic, ranks ahead of unsecured debt that is not so documented. Debt is treated as documented by a public instrument if it is acknowledged before a notary or any person authorized to administer oaths in the Republic. The Government maintains that debt of the Republic is not subject to the preferences granted under Article 2244(14) or cannot be documented by a public instrument without acknowledgment of the Republic as debtor. The Philippine courts have never addressed this matter, however, and it is uncertain whether a document evidencing the Republic’s Peso or non-Peso denominated debt (including External Indebtedness), notarized without the Republic’s participation, would be considered documented by a public instrument. If such debt were considered documented by a public instrument, it would rank ahead of the debt securities if the Republic could not meet its debt obligations.

The Republic has represented that it has not prepared, executed or filed any public instrument, as provided in Article 2244(14) of the Civil Code of the Philippines, relating to any External Indebtedness. It also has not consented or assisted in the preparation or filing of any such public instrument. The Republic also agreed that it will not create any preference or priority in respect of any External Public Indebtedness pursuant to Article 2244(14) of the Civil Code of the Philippines unless its grants equal and ratable preference or priority to amounts payable under the debt securities.

Negative Pledge Covenant

If any debt securities are outstanding, the Republic will not create or permit any Liens on its assets or revenues as security for any of its External Public Indebtedness, unless the Lien also secures the Republic’s obligations under the debt securities. In addition, the Republic will not create any preference or priority for any of its External Public Indebtedness pursuant to Article 2244(14) of the Civil Code of the Philippines, or any successor law, unless it grants equal and ratable preference or priority to amounts due under the debt securities.

The Republic may create or permit a Lien:

•

on any property or asset (or any interest in such property or asset) incurred when the property or asset was purchased, improved, constructed, developed or redeveloped to secure payment of the cost of the activity;

•

securing Refinanced External Public Indebtedness;

•

arising out of the extension, renewal or replacement of any External Public Indebtedness that is permitted to be subject to a Lien pursuant to either of the previous two bullet points, as long as the principal amount of the External Public Indebtedness so secured is not increased;

•

arising in the ordinary course of banking transactions to secure External Public Indebtedness with a maturity not exceeding one year;

•

existing on any property or asset at the time it was purchased, or arising after the acquisition under a contract entered into before and not in contemplation of the acquisition, and any extension and renewal of that Lien which is limited to the original property or asset and secures any extension or renewal of the original secured financing;

•

that:

(A)

arises pursuant to any legal process in connection with court proceedings so long as the enforcement of the Lien is stayed and the Republic is contesting the claims secured in good faith; or

(B)

secures the reimbursement obligation under any surety given in connection with the release of any Lien referred to in (A) above;

if it is released or discharged within one year of imposition; or

•

arising by operation of law, provided that any such Lien is not created or permitted to be created by the Republic for the purpose of securing any External Public Indebtedness.

The international reserves of Bangko Sentral represent substantially all of the official gross international reserves of the Republic. Because Bangko Sentral is an independent entity, the Republic and Bangko Sentral believe that the debt securities’ negative pledge covenant does not apply to Bangko Sentral’s international reserves. Bangko Sentral could therefore incur External Indebtedness secured by international reserves without securing amounts payable under the debt securities.

Events of Default

The following description does not apply to any series of debt securities that has been designated Collective Action Securities. See “Collective Action Securities—Events of Default” below for a description of the corresponding terms of Collective Action Securities.

Each of the following constitutes an event of default with respect to any series of debt securities:

(1)	*Non-Payment*: the Republic does not pay principal or interest on any debt securities of such series when due and such failure continues for 30 days;

(2)

Breach of Other Obligations: the Republic fails to observe or perform any of the covenants in the series of debt securities (other than non-payment) for 60 days after written notice of the default is delivered by any holder of debt securities to the Republic at the corporate trust office of the fiscal agent in New York City;

(3)	*Cross Default and Cross Acceleration*:

(a)

the Republic fails to make a payment of principal, premium, prepayment charge or interest when due on any External Public Indebtedness with a principal amount equal to or greater than $25,000,000 or its equivalent, and this failure continues beyond the applicable grace period; or

(b)

any External Public Indebtedness of the Republic or the central monetary authority in principal amount equal to or greater than $25,000,000 is accelerated, other than by optional or mandatory prepayment or redemption.

For the purposes of this event of default, the U.S. dollar equivalent for non-U.S. dollar debt will be computed using the middle spot rate for the relevant currency against the U.S. dollar as quoted by The Bank of New York Mellon (as successor in interest to JPMorgan Chase Bank, N.A.) on the date of determination;

(4)	*Moratorium*: the Republic declares a general moratorium on the payment of its or the central monetary authority’s External Indebtedness;

(5)	*Validity*:

(a)

the Republic, or any governmental body with the legal power and authority to declare such series of debt securities and the related Fiscal Agency Agreement invalid or unenforceable, challenges the validity of such series of debt securities or the related Fiscal Agency Agreement;

(b)

the Republic denies any of its obligations under such series of debt securities or the related Fiscal Agency Agreement; or

(c)

any legislative, executive or constitutional measure or final judicial decision renders any material provision of such series of debt securities or the related Fiscal Agency Agreement invalid or unenforceable or prevents or delays the performance of the Republic’s obligations under such series of debt securities or the related Fiscal Agency Agreement;

(6)

Failure of Authorizations: any legislative, executive or constitutional authorization necessary for the Republic to perform its material obligations under the series of debt securities or the related Fiscal Agency Agreement ceases to be in full force and effect or is modified in a manner materially prejudicial to the holders of the debt securities;

(7)	*Control* of *Assets*: the Republic or the central monetary authority does not at all times exercise full control over the Republic’s International Monetary Assets; or

(8)	*IMF* *Membership*: the Republic ceases to be a member of the IMF or loses its eligibility to use the general resources of the IMF.

The events described in paragraphs 2, 4, 5 and 6 will be events of default only if they materially prejudice the interests of holders of the debt securities.

If any of the above events of default occurs and is continuing, holders of the debt securities representing at least 25% in principal amount of the debt securities of that series then outstanding may declare all of the debt securities of the series to be due and payable immediately by written notice to the Republic and the fiscal agent. In the case of an event of default described in paragraphs 1 or 4 above, any holder of the debt securities may declare the principal amount of debt securities that it holds to be immediately due and payable by written notice to the Republic and the fiscal agent.

Investors should note that:

•

despite the procedure described above, no debt securities may be declared due and payable if the Republic cures the applicable event of default before it receives the written notice from the holder of the debt securities;

•

the Republic is not required to provide periodic evidence of the absence of defaults; and

•

the Fiscal Agency Agreement does not require the Republic to notify holders of the debt securities of an event of default or grant any holder of the debt securities a right to examine the bond register.

Modifications and Amendments; Bondholders’ Meetings

The following description does not apply to any series of debt securities that has been designated Collective Action Securities. See “Collective Action Securities—Modifications and Amendments; Bondholders’ Meetings” for a description of the corresponding terms of Collective Action Securities.

Each holder of a series of debt securities must consent to any amendment or modification of the terms of that series of debt securities or the Fiscal Agency Agreement that would:

•

change the stated maturity of the principal of the debt securities or any installment of interest;

•

reduce the principal amount of such series of debt securities or the portion of the principal amount payable upon acceleration of such debt securities;

•

change the debt securities’ interest rate;

•

change the currency of payment of principal or interest;

•

change the obligation of the Republic to pay additional amounts on account of withholding taxes or deductions; or

•

reduce the percentage of the outstanding principal amount needed to modify or amend the related Fiscal Agency Agreement or the terms of such series of debt securities.

With respect to other types of amendment or modification, the Republic may, with the consent of the holders of at least a majority in principal amount of the debt securities of a series that are outstanding, modify and amend that series of debt securities or, to the extent the modification or amendment affects that series of debt securities, the Fiscal Agency Agreement.

The Republic may at any time call a meeting of the holders of a series of debt securities to seek the holders’ approval of the modification, or amendment, or obtain a waiver, of any provision of that series of debt securities. The meeting will be held at the time and place in the Borough of Manhattan in New York City as determined by the Republic. The notice calling the meeting must be given at least 30 days and not more than 60 days prior to the meeting.

While an event of default with respect to a series of debt securities is continuing, holders of at least 10% of the aggregate principal amount of that series of debt securities may compel the fiscal agent to call a meeting of all holders of debt securities of that series.

The persons entitled to vote a majority in principal amount of the debt securities of the series that are outstanding at the time will constitute a quorum at a meeting of the holders of the debt securities. To vote at a meeting, a person must either hold outstanding debt securities of the relevant series or be duly appointed as a proxy for a holder of the debt securities. The fiscal agent will make all rules governing the conduct of any meeting.

The Fiscal Agency Agreement and a series of debt securities may be modified or amended, without the consent of the holders of the debt securities, to:

•

add covenants of the Republic that benefit holders of the debt securities;

•

surrender any right or power given to the Republic;

•

secure the debt securities; or

•

cure any ambiguity or correct or supplement any defective provision in the Fiscal Agency Agreement or the debt securities, without materially and adversely affecting the interests of the holders of the debt securities.

Replacement of Debt Securities

If a debt security becomes mutilated, defaced, destroyed, lost or stolen, the Republic may issue, and the fiscal agent will authenticate and deliver, a substitute debt security. The Republic and the fiscal agent will require proof of any claim that a debt security was destroyed, lost or stolen.

The applicant for a substitute debt security must indemnify the Republic, the fiscal agent and any other agent for any losses they may suffer relating to the debt security that was destroyed, lost or stolen. The applicant will be required to pay all expenses and reasonable charges associated with the replacement of the mutilated, defaced, destroyed, lost or stolen debt security.

Fiscal Agent

The Republic will appoint a fiscal agent or agents in connection with each series of the debt securities whose duties will be governed by the related Fiscal Agency Agreement. Different fiscal agents may be appointed for different series of debt securities. The Republic may maintain bank accounts and a banking relationship with each fiscal agent. Each fiscal agent is the agent of the Republic and does not act as a trustee for the holders of the debt securities.

Notices

All notices will be mailed to the registered holders of a series of debt securities. If a depositary is the registered holder of global securities, each beneficial holder must rely on the procedures of the depositary and its participants to receive notices, subject to any statutory or regulatory requirements.

If the Republic lists a series of debt securities on the Luxembourg Stock Exchange, and the rules of that exchange so require, all notices to holders of that series of debt securities will be published in a daily newspaper of general

circulation in Luxembourg. The Republic expects that the Luxemburger Wort will be the newspaper. If notice cannot be published in an appropriate newspaper, notice will be considered validly given if made pursuant to the rules of the Luxembourg Stock Exchange.

Governing Law

The Fiscal Agency Agreement and the debt securities will be governed by the laws of the State of New York without regard to any principles of New York law requiring the application of the laws of another jurisdiction. Nevertheless, all matters governing the authorization, execution and delivery of the debt securities and the Fiscal Agency Agreement by the Republic will be governed by the laws of the Republic.

Further Issues of Debt Securities

The following description does not apply to any series of debt securities that has been designated Collective Action Securities. See “Collective Action Securities—Further Issues of Debt Securities” for a description of the corresponding terms of Collective Action Securities.

The Republic may, without the consent of the holders of the debt securities, create and issue additional debt securities with the same terms and conditions as any series of bonds (or that are the same in all respects except for the amount of the first interest payment and for the interest paid on the series of debt securities prior to the issuance of the additional debt securities). The Republic may consolidate such additional debt securities with the outstanding debt securities to form a single series. Any further debt securities forming a single series with the outstanding debt securities of any series constituted by a Fiscal Agency Agreement shall be constituted by an agreement supplemental to such relevant Fiscal Agency Agreement.

Jurisdiction and Enforceability

The Republic is a foreign sovereign government and your ability to collect on judgments of U.S. courts against the Republic may be limited.

The Republic will irrevocably appoint the Philippine Consul General in New York, New York as its authorized agent to receive service of process in any suit based on any series of debt securities which any holder of the debt securities may bring in any state or federal court in New York City. The Republic submits to the jurisdiction of any state or federal court in New York City or any competent court in the Republic in such action. The Republic waives, to the extent permitted by law, any objection to proceedings in such courts. The Republic also waives irrevocably any immunity from jurisdiction to which it might otherwise be entitled in any suit based on any series of debt securities.

Because of its waiver of immunity, the Republic would be subject to suit in competent courts in the Republic. A judgment against the Republic in state or federal court in New York City would be recognized and enforced by the courts of the Republic in any enforcement action without re-examining the issues if:

•

such judgment was not obtained by collusion or fraud;

•

the foreign court rendering such judgment had jurisdiction over the case;

•

the Republic had proper notice of the proceedings before the foreign court; and

•

such judgment was not based upon a clear mistake of law or fact.

Notwithstanding any of the above, the Philippine Consul General is not the agent for receipt of service for suits under the U.S. federal or state securities laws, and the Republic’s waiver of immunity does not extend to those actions. In addition, the Republic does not waive immunity relating to its:

•

properties and assets used by a diplomatic or consular mission;

•

properties and assets under the control of its military authority or defense agency; and

•

properties and assets located in the Republic and dedicated to public or governmental use.

If you bring a suit against the Republic under U.S. federal or state securities laws, unless the Republic waives immunity, you would be able to obtain a United States judgment against the Republic only if a court determined that the Republic is not entitled to sovereign immunity under the United States Foreign Sovereign Immunities Act. Even if you obtained a United States judgment in any such suit, you may not be able to enforce the judgment in the Republic. Moreover, you may not be able to enforce a judgment obtained under the Foreign Sovereign Immunities Act against the Republic’s property located in the United States except under the limited circumstances specified in the act.

Glossary of Certain Defined Terms

Certain definitions used in the Fiscal Agency Agreement are set forth below. For a full explanation of all of these terms or any capitalized terms used in this section you should refer to the Fiscal Agency Agreement.

“External Indebtedness” means Indebtedness denominated or payable by its terms, or at the option of the holder, in a currency or currencies other than that of the Republic.

“External Public Indebtedness” means any External Indebtedness in the form of bonds, debentures, notes or other similar instruments or other securities which is, or is eligible to be, quoted, listed or ordinarily purchased and sold on any stock exchange, automated trading system or over-the-counter or other securities market.

“Indebtedness” means any indebtedness for money borrowed or any guarantee of indebtedness for money borrowed.

“International Monetary Assets” means all (i) gold, (ii) Special Drawing Rights, (iii) Reserve Positions in the Fund and (iv) Foreign Exchange.

“Lien” means any mortgage, deed of trust, charge, pledge, lien or other encumbrance or preferential arrangement which has the practical effect of constituting a security interest.

“Refinanced External Public Indebtedness” means the U.S.$130,760,000 Series A Interest Reduction Bonds due 2007 issued by the Republic on December 1, 1992, the U.S.$626,616,000 Series B Interest Reduction Bonds due 2008 issued by the Republic on December 1, 1992, the U.S.$153,490,000 Series A Principal Collateralized Interest Reduction Bonds due 2018 issued by the Republic on December 1, 1992 and the U.S.$1,740,600,000 Series B Collateralized Interest Reduction Bonds due 2017 issued by the Republic on December 1, 1992.

“Special Drawing Rights,” “Reserve Positions in the Fund” and “Foreign Exchange,” have, as to the type of assets included, the meanings given to them in the IMF’s publication entitled “International Financial Statistics” or any other meaning formally adopted by the IMF from time to time.

Description of the Warrants

Each series of warrants will be issued under a warrant agreement (each, as applicable to a series of warrants, the “Warrant Agreement”) to be entered into between the Republic and a bank or trust company as warrant agent. The description below summarizes some of the provisions of warrants for the purchase of bonds that the Republic may issue from time to time and of the Warrant Agreement. Copies of the forms of warrants and the Warrant Agreement are or will be filed as exhibits to the registration statement of which this prospectus is a part. Since it is only a summary, the description may not contain all of the information that is important to you as a potential investor in the warrants.

The description of the warrants that will be contained in the prospectus supplement will supplement this description and, to the extent inconsistent with this description, replace it.

General Terms of the Warrants

The prospectus supplement relating to the series of warrants will set forth:

•

The terms of the bonds purchasable upon exercise of the warrants, as described above under “Description of the Debt Securities—General Terms of the Bonds”;

•

The principal amount of bonds purchasable upon exercise of one warrant and the exercise price;

•

The procedures and conditions for the exercise of the warrants;

•

The dates on which the right to exercise the warrants begins and expires;

•

Whether and under what conditions the warrants and any bonds issued with the warrants will be separately transferable;

•

Whether the warrants will be issued in certificated or global form and, if in global form, information with respect to applicable depositary arrangements;

•

If issued in certificated form, whether the warrants will be issued in registered or bearer form, whether they will be exchangeable between such forms, and, if issued in registered form, where they may be transferred and registered; and

•

Other specific provisions.

The warrants will be subject to the provisions set forth under “Description of the Securities—Description of the Debt Securities,” “—Governing Law” and “—Jurisdiction and Enforceability.”

Limitations on Issuance of Bearer Debt Securities

Bearer securities will not be offered, sold or delivered in the United States or its possessions or to a United States person, except in certain circumstances permitted by U.S. Treasury Regulations. Bearer securities will initially be represented by temporary global securities (without interest coupons) deposited with a common depositary in London for the Euroclear System for credit to designated accounts. Unless otherwise indicated in the applicable prospectus supplement:

•

each temporary global security will be exchangeable for definitive bearer securities on or after the date that is 40 days after issuance only upon receipt of certification of non-United States beneficial ownership of the temporary global security as provided in United States tax regulations, provided that no bearer security will be mailed or otherwise delivered to any location in the United States in connection with the exchange; and

•

any interest payable on any portion of a temporary global security with respect to any interest payment date occurring prior to the issuance of definitive bearer securities will be paid only upon receipt of certification of non-United States beneficial ownership of the temporary global security as provided in United States tax regulations.

Bearer securities (other than temporary global debt securities) and any related coupons will bear the following legend: “Any United States person who holds this obligation will be subject to limitations under the United States federal income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code.” The sections referred to in the legend provide that, with certain exceptions, a United States person who holds a bearer security or coupon will not be allowed to deduct any loss realized on the disposition of the bearer security, and any gain (which might otherwise be characterized as capital gain) recognized on the disposition will be treated as ordinary income.

For the purposes of this section, “United States person” means:

•

an individual citizen or resident of the United States;

•

a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof;

•

an estate the income of which is subject to United States federal income taxation regardless of its source; or

•

a trust if a United States court is able to exercise primary supervision over the trust’s administration and one or more United States persons have the authority to control all of the trust’s substantial decisions.

For the purposes of this section, “United States” means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction.

Ranking Provisions of the Debt Securities

In NML Capital, Ltd. v. Republic of Argentina, the U.S. Court of Appeals for the Second Circuit has ruled that the ranking clause in bonds issued by the Republic of Argentina prevents Argentina from making payments in respect of bonds Argentina issued in a restructuring unless Argentina makes pro rata payments on defaulted bonds that were not exchanged in the restructuring and which rank pari passu with the bonds issued in the restructuring. The U.S. Supreme Court has declined to hear the case in an appeal by Argentina.

An equal ranking provision similar to the provision litigated in NML Capital, Ltd. v. Republic of Argentina has been contained in securities previously issued by the Republic. The Republic has always intended that the equal ranking clause appearing in securities previously issued by the Republic would permit it to redeem or to make principal and interest payments in respect of some of its external debt without making ratable payments in respect of other external debt. However, the decision of the Second Circuit could affect that interpretation, which in turn could potentially hinder or impede debt restructurings and distressed debt management transactions by the Republic, by affecting the voting decisions of bondholders under, for example, the collective action clause contained in previously issued debt securities. Although a court interpreting the Republic’s equal ranking clause could reach a decision different from the Second Circuit in the litigation involving Argentina, the Republic cannot predict whether or in what manner the courts would resolve a dispute over this clause or how any such judgment would be applied or implemented. Further, the Republic cannot predict whether the litigation described above will affect the liquidity of the trading market for the Republic’s debt securities or the price at which the debt securities will trade in the secondary market.

COLLECTIVE ACTION SECURITIES

The Republic may designate a particular series of debt securities to be “Collective Action Securities,” the specific terms of which will be described in the prospectus supplement relating to such series of debt securities. Collective Action Securities will have the same terms and conditions as the securities described under the heading “Description of the Debt Securities” above, except that such Collective Action Securities shall contain different provisions relating to certain aspects of default, acceleration, voting on amendments, modifications, changes or waivers and further issues of debt securities as follows:

Events of Default

Each of the following constitutes an event of default with respect to any series of debt securities:

(1)	*Non-Payment*: the Republic does not pay principal or interest on any debt securities of such series when due and such failure continues for 30 days;

(2)

(3)	*Cross* *Default* *and* *Cross* *Acceleration*:

(a)

(b)

any External Public Indebtedness of the Republic or the central bank of the Republic in principal amount equal to or greater than $25,000,000 is accelerated, other than by optional or mandatory prepayment or redemption.

(4)	*Moratorium*: the Republic declares a general moratorium on the payment of its or the central monetary authority’s External Indebtedness;

(5)	*Validity*:

(a)

(b)

the Republic denies any of its obligations under such series of debt securities or the related Fiscal Agency Agreement; or

(c)

(6)

(7)	*Control* of *Assets*: the Republic or the central bank of the Republic does not at all times exercise full control over the Republic’s International Monetary Assets; or

(8)	*IMF* *Membership*: the Republic ceases to be a member of the IMF or loses its eligibility to use the general resources of the IMF.

The events described in paragraphs 2, 4, 5 and 6 will be events of default only if they materially prejudice the interests of holders of the debt securities.

If any of the above events of default occurs and is continuing, holders of the debt securities representing at least 25% in principal amount of the debt securities of that series then outstanding may declare all of the debt securities of the series to be due and payable immediately by written notice to the Republic and the fiscal agent. The holders of more than 50% of the aggregate principal amount of the outstanding debt securities of the affected series may rescind a declaration of acceleration if the event or events of default giving rise to the declaration have been cured or waived.

Investors should note that:

•

the Republic is not required to provide periodic evidence of the absence of defaults; and

•

Modifications and Amendments; Bondholders’ Meetings

The Republic may call a meeting of holders of debt securities of any series at any time. The Republic will determine the time and place of the meeting and will notify the holders of the time, place and purpose of the meeting not less than 30 and not more than 60 days before the meeting.

In addition, the Republic or the fiscal agent will call a meeting of holders of debt securities of any series if the holders of at least 10% in principal amount of all debt securities of the series then outstanding have delivered a written request to the Republic or the fiscal agent (with a copy to the Republic) setting out the purpose of the meeting. Within 10 days of receipt of such written request or copy thereof, the Republic will notify the fiscal agent and the fiscal agent will notify the holders of the time, place and purpose of the meeting, to take place not less than 30 and not more than 60 days after the date on which such notification is given.

Only holders of debt securities of the relevant series and their proxies are entitled to vote at a meeting. The Republic will set the procedures governing the conduct of the meeting and if additional procedures are required, the Republic will establish such procedures as are customary in the market.

Modifications may also be approved by holders of debt securities pursuant to written action with the consent of the requisite percentage of debt securities of the relevant series. The fiscal agent will solicit the consent of the relevant holders to the modification not less than 10 and not more than 30 days before the expiration date for the receipt of such consents as specified by the fiscal agent.

The holders of a series of debt securities may generally approve any proposal by the Republic to modify or take action with respect to the Fiscal Agency Agreement or the terms of the debt securities of that series with the affirmative vote (if approved at a meeting of the holders) or consent (if approved by written action) of holders of more than 50% of the outstanding principal amount of the debt securities of that series.

Holders of any series of debt securities issued under the Fiscal Agency Agreement may approve, by vote or consent through one of three modification methods described below, any modification, amendment, supplement

or waiver proposed by the Republic that would do any of the following (such subjects referred to as “reserve matters”) with respect to such series of debt securities:

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change the date on which any amount is payable;

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reduce the principal amount (other than in accordance with the express terms of the debt securities and the Fiscal Agency Agreement);

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reduce the interest rate;

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change the method used to calculate any amount payable (other than in accordance with the express terms of the debt securities and the Fiscal Agency Agreement);

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change the currency or place of payment of any amount payable;

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modify the Republic’s obligation to make any other payments (including any redemption price therefor);

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change the identity of the obligor;

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change the definition of “outstanding” or the percentage of affirmative votes or written consents, as the case may be, required to make a reserve matter modification;

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change the definition of “Uniformly Applicable,” “reserve matter” or “reserve matter modification;”

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authorize the fiscal agent, on behalf of all holders of the debt securities, to exchange or substitute all the debt securities for, or convert all the debt securities into, other obligations or securities of the Republic or any other person; or

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change the legal ranking, governing law, submission to jurisdiction or waiver of immunities provisions of the terms of such debt securities.

A change to a reserve matter, including the payment terms of the debt securities of any series, can be made without the holder’s consent, as long as the change is approved, pursuant to one of the three following modification methods, by vote or consent by:

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in the case of a proposed modification to a single series of debt securities, the holders of more than 75% of the aggregate principal amount of the outstanding debt securities of that series;

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where such proposed modification would affect the outstanding debt securities of any two or more series issued under the Fiscal Agency Agreement, the holders of more than 75% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate, if certain Uniformly Applicable requirements are met; or

•

where such proposed modification would affect the outstanding debt securities of any two or more series issued under the Fiscal Agency Agreement, whether or not the Uniformly Applicable requirements are met, the holders of more than 66 2/3% of the aggregate principal amount of the outstanding debt securities of all series affected by the proposed modification, taken in the aggregate, and the holders of more than 50% of the aggregate principal amount of the outstanding debt securities of each series affected by the modification, taken individually.

Any modification consented to or approved by the holders of debt securities pursuant to the above provisions will be conclusive and binding on all holders of the relevant series of debt securities or all holders of all series of debt securities affected by a cross-series modification, as the case may be, whether or not they have given such consent or approval, and on all future holders of those debt securities whether or not notation of such modification is made upon the debt securities. Any instrument given by or on behalf of any holder of a debt security in connection with any consent to or approval of any such modification will be conclusive and binding on all subsequent holders of that debt security.

For so long as any series of Existing Securities are outstanding, if the Republic certifies to the fiscal agent and to the fiscal agent under the Existing Fiscal Agency Agreement that a cross-series modification is being sought

simultaneously with an Existing Fiscal Agency Agreement Reserve Matter Modification, the Existing Securities affected by such Existing Fiscal Agency Agreement Reserve Matter Modification shall be treated as “series affected by that proposed modification” as that phrase is used in the Fiscal Agency Agreement with respect to both cross-series modifications with single aggregated voting and cross-series modifications with two-tier voting; provided, that if the Republic seeks a cross-series modification with single aggregated voting, in determining whether such modification will be considered Uniformly Applicable, the holders of any series of Existing Securities affected by the Existing Fiscal Agency Agreement Reserve Matter Modification shall be deemed “holders of securities of all series affected by that modification,” for the purpose of the Uniformly Applicable definition. It is the intention that in the circumstances described in respect of any cross-series modification, the votes of the holders of the affected Existing Securities be counted for purposes of the voting thresholds specified in the Fiscal Agency Agreement for the applicable cross-series modification as though those Existing Securities had been affected by that cross-series modification although the effectiveness of any modification, as it relates to the Existing Securities, shall be governed exclusively by the terms and conditions of those Existing Securities and by the Existing Fiscal Agency Agreement; provided, however, that no such modification as to the affected Existing Securities will be effective unless such modification shall have also been adopted by the holders of the Existing Securities pursuant to the amendment and modification provisions of such Existing Securities.

The Republic may select, in its discretion, any modification method for a reserve matter modification in accordance with the Fiscal Agency Agreement and to designate which series of debt securities will be included for approval in the aggregate of modifications affecting two or more series of debt securities. Any selection of a modification method or designation of series to be included will be final for the purpose of that vote or consent solicitation.

“Uniformly Applicable,” as referred to above, means a modification by which holders of debt securities of any series affected by that modification are invited to exchange, convert or substitute their debt securities on the same terms for (x) the same new instruments or other consideration or (y) new instruments or other consideration from an identical menu of instruments or other consideration. It is understood that a modification will not be considered to be uniformly applicable if each exchanging, converting or substituting holder of debt securities of any series affected by that modification is not offered the same amount of consideration per amount of principal, the same amount of consideration per amount of interest accrued but unpaid and the same amount of consideration per amount of past due interest, respectively, as that offered to each other exchanging, converting or substituting holder of debt securities of any series affected by that modification (or, where a menu of instruments or other consideration is offered, each exchanging, converting or substituting holder of debt securities of any series affected by that modification is not offered the same amount of consideration per amount of principal, the same amount of consideration per amount of interest accrued but unpaid and the same amount of consideration per amount of past due interest, respectively, as that offered to each other exchanging, converting or substituting holder of debt securities of any series affected by that modification electing the same option under such menu of instruments).

As used in the preceding paragraphs:

“Existing Securities” means any of the 1999 Securities, 2004 Securities and 2006 Securities, as applicable.

“Existing Fiscal Agency Agreement” means any of the 1999 Fiscal Agency Agreement, 2004 Fiscal Agency Agreement and 2006 Fiscal Agency Agreement, as applicable.

“Existing Fiscal Agency Agreement Reserve Matter Modification” means any modification to the terms and conditions of one or more series of the Existing Securities pursuant to Section 12 of the 1999 Fiscal Agency Agreement, Section 19 of the 2004 Fiscal Agency Agreement or Section 19 of the 2006 Fiscal Agency Agreement, as applicable.

“1999 Securities” means Securities authenticated and delivered under the 1999 Fiscal Agency Agreement.

“2004 Securities” means Securities authenticated and delivered under the 2004 Fiscal Agency Agreement.

“2006 Securities” means Securities authenticated and delivered under the 2006 Fiscal Agency Agreement.

“1999 Fiscal Agency Agreement” means the Fiscal Agency Agreement dated as of October 4, 1999 between the Republic of the Philippines, as issuer, and the fiscal agent named therein.

“2004 Fiscal Agency Agreement” means the Fiscal Agency Agreement dated as of October 4, 1999 between the Republic of the Philippines, as issuer, and the fiscal agent named therein, as amended by Supplement No. 1 to the Fiscal Agency Agreement dated as of February 26, 2004.

“2006 Fiscal Agency Agreement” means the Fiscal Agency Agreement dated as of October 4, 1999 between the Republic of the Philippines, as issuer, and the fiscal agent named therein, as amended by Supplement No. 1 to the Fiscal Agency Agreement dated as of February 26, 2004 and Supplement No. 2 to the Fiscal Agency Agreement dated as of January 11, 2006.

Before soliciting any consent or vote of any holder of debt securities for any change to a reserve matter, the Republic will provide the following information to the fiscal agent for distribution to the holders of debt securities of any series that would be affected by the proposed modification:

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a description of the Republic’s economic and financial circumstances that are in the Republic’s opinion, relevant to the request for the proposed modification, a description of the Republic’s existing debts and description of its broad policy reform program and provisional macroeconomic outlook;

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if the Republic shall at the time have entered into an arrangement for financial assistance with multilateral and/or other major creditors or creditor groups and/or an agreement with any such creditors regarding debt relief, (x) a description of any such arrangement or agreement and (y) where permitted under the information disclosure policies of the multilateral or other creditors, as applicable, a copy of the arrangement or agreement;

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a description of the Republic’s proposed treatment of external debt instruments that are not affected by the proposed modification and its intentions with respect to any other major creditor groups; and

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if the Republic is then seeking any reserve matter modification affecting any other series of debt securities, a description of that proposed modification.

Other Amendments

The Republic and the fiscal agent may, without the vote or consent of any holder of debt securities of any series, amend the Fiscal Agency Agreement (as it refers to such series) or such debt securities for the purpose of:

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adding to the Republic’s covenants for the benefit of the holders of the debt securities of that series;

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surrendering any of the Republic’s rights or powers with respect to the debt securities of that series;

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securing the debt securities of that series;

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curing any ambiguity or curing, correcting or supplementing any defective provision in the debt securities of that series or the Fiscal Agency Agreement;

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amending the debt securities of that series or the Fiscal Agency Agreement in any manner that the Republic may determine and that does not materially adversely affect the interests of any holders of the debt securities of that series; or

•

correcting in the opinion of the Republic, a manifest error of a formal, minor or technical nature.

For purposes of determining whether the required percentage of holders of the debt securities of a series has approved any amendment, modification or change to, or waiver of, the debt securities or the Fiscal Agency

Agreement, or whether the required percentage of holders has delivered a notice of acceleration of the debt securities of that series, debt securities owned, directly or indirectly, by the Republic or any public sector instrumentality of the Republic will be disregarded and deemed not to be outstanding. As used in this paragraph, “public sector instrumentality” means Bangko Sentral, any department, ministry or agency of the Republic or any corporation, trust, financial institution or other entity owned or controlled by the Republic or any of the foregoing, and “control” means the power, directly or indirectly, through the ownership of voting securities or other ownership interests or otherwise, to direct the management of or elect or appoint a majority of the board of directors or other persons performing similar functions in lieu of, or in addition to, the board of directors of a corporation, trust, financial institution or other entity.

Further Issues of Debt Securities

The Republic may, without the consent of the holders of the debt securities, create and issue additional debt securities with the same terms and conditions as any series of bonds (or that are the same in all respects except for the amount of the first interest payment and for the interest paid on the series of debt securities prior to the issuance of the additional debt securities) provided, however, that such additional notes do not have a greater amount of original issue discount for U.S. federal tax purposes than the outstanding notes have as of the date of the issue of such additional notes. The Republic may consolidate such additional debt securities with the outstanding debt securities to form a single series. Any further debt securities forming a single series with the outstanding debt securities of any series constituted by a Fiscal Agency Agreement shall be constituted by a supplement to such relevant Fiscal Agency Agreement.

TAXATION

The following discussion summarizes certain Philippine and U.S. federal income tax considerations that may be relevant to you if you invest in debt securities of the Republic. This summary is based on laws, regulations, rulings and decisions now in effect, all of which may change. Any change could apply retroactively and could affect the continued validity of this summary.

This summary does not describe all of the tax considerations that may be relevant to you or your situation, particularly if you are subject to special tax rules. You should consult your tax advisor about the tax consequences of holding debt securities, including the relevance to your particular situation of the considerations discussed below, as well as of state, local or other tax laws.

Philippine Taxation

The following is a summary of certain Philippine tax consequences that may be relevant to non-Philippine holders of the debt securities in connection with the holding and disposition of the debt securities. The Republic uses the term “non-Philippine holders” to refer to (i) non-residents of the Philippines who are neither citizens of the Philippines nor are engaged in trade or business within the Philippines or (ii) non-Philippine corporations not engaged in trade or business in the Philippines.

This summary is based on Philippine laws, rules, and regulations in effect as of the date of this prospectus, all of which are subject to change and may apply retroactively. It is not intended to constitute a complete analysis of the tax consequences under Philippine law of the receipt, ownership, or disposition of the debt securities, in each case by non-Philippine holders, nor to describe any of the tax consequences that may be applicable to citizens or residents of the Republic.

If you are not a non-Philippine holder, you should consult your tax advisor about the consequences of holding these debt securities.

Effect of Holding Global Bonds

Payments by the Republic of principal of and interest on the debt securities to a non-Philippine holder will not subject such non-Philippine holder to taxation in the Philippines by reason solely of the holding of the debt securities or the receipt of principal or interest in respect thereof.

Taxation of Interest on the Global Bonds

When the Republic makes payments of principal and interest to you, as a non-Philippine holder of the debt securities, no amount will be withheld from such payments for, or on account of, any taxes of any kind imposed, levied, withheld or assessed by the Philippines or any political subdivision or taxing authority thereof or therein.

Taxation of Capital Gains

Non-Philippine holders of the debt security will not be subject to Philippine income or withholding tax in connection with the sale, exchange, or retirement of a debt security if such sale, exchange or retirement is made outside the Philippines or an exemption is available under an applicable tax treaty in force between the Philippines and the country of domicile of the non-Philippine holder. If the debt securities have a maturity of more than five years from the date of issuance, any gains realized by a holder of the debt security will not, under the Philippine Tax Code, be subject to Philippine income tax.

Documentary Stamp Taxes

No documentary stamp tax is imposed upon the transfer of the debt securities. A documentary stamp tax at the rate of ₱1.50 for every ₱200.00 of the issue value of the debt securities is payable upon the issuance of the debt securities and will be for the account of the Republic.

Estate and Donor’s Taxes

The transfer of a debt security by way of succession upon the death of a non-Philippine holder will be subject to Philippine estate tax at a fixed rate of 6% based on the value of the net estate.

The transfer of a debt security by gift to an individual who is related or unrelated to the non-Philippine holder will generally be subject to a Philippine donor’s tax at a fixed rate of 6% based on the total gifts in excess of ₱250,000 during the relevant calendar year.

The foregoing apply even if the holder is a non-Philippine holder. However, the Republic will not collect estate and donor’s taxes on the transfer of the debt securities by gift or succession if the deceased at the time of death, or the donor at the time of donation, was a citizen and resident of a foreign country that provides certain reciprocal rights to citizens of the Philippines (a “Reciprocating Jurisdiction”). For these purposes, a Reciprocating Jurisdiction is a foreign country which at the time of death or donation (i) did not impose a transfer tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country or (ii) allowed a similar exemption from transfer or death taxes of every character or description in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country.

United States Tax Considerations

The following discussion summarizes material U.S. federal income tax consequences that may be relevant to you if you invest in debt securities. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury Regulations, published rulings, administrative pronouncements, and court decisions, all as of the date of this prospectus and all subject to change, possibly with retroactive effect. Any such change could affect the tax consequences described below. This summary deals only with beneficial owners of debt securities that will hold debt securities as capital assets. The discussion does not cover all aspects of U.S. federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership or disposition of debt securities by particular investors (including consequences under the alternative minimum tax or net investment income tax), and does not address state, local, U.S. estate and gift, non-U.S. or other tax laws. It also does not address considerations that may be relevant to you if you are an investor that is subject to special tax rules (such as a financial institution, real estate investment trust, regulated investment company, insurance company, dealer in securities or currencies, trader in securities or commodities that elects mark to market treatment, a person that will hold debt securities in an individual retirement account or other tax deferred account, as a hedge against currency risk or as a position in a “straddle” or conversion transaction, a tax exempt organization, a U.S. holder (as defined below) that is required to take certain amounts into income no later than the time such amounts are reflected on an applicable financial statement, a person that has ceased to be a U.S. citizen or lawful permanent resident of the United States, an investor holding the debt securities in connection with a trade or business conducted outside of the United States, a U.S. citizen or lawful permanent resident living abroad or a U.S. holder whose “functional currency” is not the U.S. dollar).

You will be a U.S. holder if you are, for U.S. income tax purposes: (i) an individual who is a citizen or resident of the United States, (ii) a corporation created or organized in or under the laws of the United States or any state thereof (including the District of Columbia), (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if a court within the United States is able to execute primary supervision over its administration and one or more U.S. persons have the authority to control all the substantial decisions of such trust. Notwithstanding the preceding sentence, to the extent provided in U.S. Treasury Regulations, certain trusts in existence on August 20, 1996, treated as United States persons prior to such date, and that have a valid election in effect to be treated as a United States person, shall also be considered U.S. holders.

A “non-U.S. holder” is any person other than an entity treated as a partnership for U.S. federal income tax purposes that is not a U.S. holder.

If you are a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds debt securities, the tax consequences of an investment in debt securities will generally depend on the status of the partners and the activities of the partnership. Prospective purchasers that are entities or arrangements treated as partnerships for U.S. federal income tax purposes should consult their tax advisors concerning the U.S. federal income tax consequences to them and their partners of the acquisition, ownership and disposition of debt securities by the partnership.

You should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of ownership and disposition of debt securities, as well as the consequences to you arising under state and local tax laws, U.S. estate and gift tax laws, and the laws of any other taxing jurisdiction, and possible changes in tax law.

Bearer debt securities are not being offered to U.S. holders. A U.S. holder who owns a bearer debt security may be subject to limitations under U.S. income tax laws, including the limitations provided in sections 165(j) and 1287(a) of the Code.

United States Holders

Payments or Accruals of Interest

Payments or accruals of “qualified stated interest” (as defined below) on a debt security will be taxable to you as ordinary interest income at the time that you receive or accrue such amounts (in accordance with your regular method of tax accounting). If you use the cash method of tax accounting and you receive payments of interest pursuant to the terms of a debt security in a currency other than U.S. dollars (a “foreign currency”), the amount of interest income you will realize will be the U.S. dollar value of the foreign currency payment based on the exchange rate in effect on the date you receive the payment regardless of whether you convert the payment into U.S. dollars. If you are an accrual basis U.S. holder, the amount of interest income you will realize will be based on the average exchange rate in effect during the interest accrual period (or with respect to an interest accrual period that spans two taxable years, at the average exchange rate for the partial period within each taxable year). Alternatively, an accrual basis U.S. holder may elect to translate all interest income on foreign currency denominated debt securities at the spot rate of exchange on the last day of the accrual period (or the last day of the accrual period in each taxable year, in the case of an accrual period that spans more than one taxable year), or on the date that you receive the interest payment if that date is within five business days of the end of the accrual period. If you make this election you must apply it consistently to all debt instruments from year to year and you cannot change the election without the consent of the Internal Revenue Service (the “IRS”). If you use the accrual method of accounting for tax purposes you will recognize foreign currency gain or loss on the receipt of a foreign currency interest payment if the exchange rate in effect on the date the payment is received differs from the rate applicable to a previous accrual of that interest income regardless of whether the payment is in fact converted into U.S. dollars. This foreign currency gain or loss will be treated as U.S. source ordinary income or loss.

Payments of interest on the debt securities and original issue discount (as defined below), if any, accrued with respect to the debt securities will be treated as non-U.S. source income for the purposes of calculating a U.S. holder’s foreign tax credit limitation. The limitation on non-U.S. taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and the timing thereof are complex. You should consult your own tax advisors regarding the availability of a foreign tax credit under your particular situation.

Sale, Exchange or Retirement of Debt Securities

You will generally recognize gain or loss on the sale, exchange or retirement of debt securities equal to the difference between the amount realized on the sale, exchange or retirement (less any accrued but unpaid interest

not previously included in income, which will be subject to tax in the manner described above under “Payments or Accruals of Interest”) and the adjusted tax basis of the debt securities. Your adjusted tax basis in a debt security generally will equal the cost of the debt security to you increased by any amounts that you are required to include in income under the rules governing original issue discount and market discount and will decrease by the amount of any amortized premium and any payments other than qualified stated interest made on the debt security. The rules for determining these amounts are discussed below. If you purchase a debt security that is denominated in a foreign currency, the cost to you (and therefore, generally, your initial tax basis) will be the U.S. dollar value of the foreign currency purchase price on the date of purchase calculated at (i) the exchange rate in effect on the date of purchase or (ii) if the foreign currency debt security is traded on an established securities market and you are a cash basis taxpayer, or if you are an accrual basis taxpayer that so elects, the spot rate of exchange on the settlement date of your purchase. The amount of any subsequent adjustments to your tax basis in a debt security in respect of foreign currency denominated original issue discount, market discount and premium will be determined in the manner described below. If you convert U.S. dollars into a foreign currency and then immediately use that foreign currency to purchase a debt security, you generally will not have any taxable gain or loss as a result of the conversion or purchase.

If you sell or exchange a debt security for a foreign currency, or receive foreign currency on the retirement of a debt security, the amount you will realize for U.S. federal income tax purposes generally will be the U.S. dollar value of the foreign currency that you receive calculated at (i) the exchange rate in effect on the date the foreign currency debt security is disposed of or retired or (ii) if you dispose of a foreign currency debt security that is traded on an established securities market and you are a cash basis U.S. holder, or if you are an accrual basis holder that so elects, the spot rate of exchange on the settlement date of the sale, exchange or retirement.

The election available to accrual basis taxpayers in respect of the purchase and sale of foreign currency debt securities traded on an established securities market, which is discussed in the two preceding paragraphs, must be applied consistently to all debt instruments from year to year and cannot be changed without the consent of the IRS.

Except as discussed below with respect to market discount, short-term debt securities and foreign currency gain or loss, the gain or loss that you recognize on the sale, exchange or retirement of a debt security generally will be capital gain or loss, and will be long-term capital gain or loss if you have held the debt security for more than one year. The Code provides preferential treatment under certain circumstances for net long-term capital gains recognized by non-corporate investors. Capital gain or loss, if any, recognized by a U.S. holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. The ability of U.S. holders to offset capital losses against income is limited.

Despite the foregoing, the gain or loss that you recognize on the sale, exchange or retirement of a foreign currency debt security generally will be treated as ordinary income or loss to the extent that the gain or loss is attributable to changes in exchange rates during the period in which you held the debt security. This foreign currency gain or loss will not be treated as an adjustment to interest income that you receive on the debt security.

Original Issue Discount

If the Republic issues debt securities at a discount from their stated redemption price at maturity, and the discount is equal to or more than the product of one-fourth of one per cent (0.25%) of the stated redemption price at maturity of the debt securities multiplied by the number of full years to their maturity, the debt securities will be “OID debt securities.” The difference between the issue price and the stated redemption price at maturity of OID debt securities is the “original issue discount” or “OID” on OID debt securities. The “issue price” of the debt securities will be the first price at which a substantial amount of the debt securities is sold to the public (i.e., excluding sales of debt securities to underwriters, placement agents, wholesalers or similar persons). The “stated redemption price at maturity” will include all payments under the debt securities other than payments of qualified stated interest. The term “qualified stated interest” generally means stated interest that is unconditionally payable

in cash or property (other than debt instruments issued by the Republic) at least annually during the entire term of a debt security at a single fixed interest rate or, subject to certain conditions, based on one or more variable rates. A debt security that provides for the payment of amounts other than qualified stated interest before maturity (an “installment obligation”) will be treated as an OID debt security if the excess of its stated redemption price at maturity over its issue price is equal to or greater than 0.25% of its stated redemption price at maturity multiplied by the weighted average maturity of the debt security. The weighted average maturity is the sum of the following amounts determined for each payment on a debt security (other than a payment of qualified stated interest): (i) the number of complete years from the issue date until the payment is made multiplied by (ii) a fraction, the numerator of which is the amount of the payment and the denominator of which is the debt security’s stated redemption price at maturity.

If you invest in OID debt securities you generally will be subject to the special tax accounting rules for OID obligations provided by the Code and U.S. Treasury Regulations promulgated thereunder. You should be aware that, as described in greater detail below, if you invest in an OID debt security you generally will be required to include OID in your gross income as ordinary income for U.S. federal income tax purposes as it accrues, although you may not yet have received the cash attributable to that income.

In general, and regardless of whether you use the cash or the accrual method of tax accounting, if you are the holder of an OID debt security with a maturity greater than one year, you will be required to include in your gross income the sum of the “daily portions” of OID on that debt security for all days during the taxable year that you own the debt security. The daily portions of OID on an OID debt security are determined by allocating to each day in any accrual period a ratable portion of the OID allocable to that period. Accrual periods may be any length and may vary in length over the term of an OID debt security, so long as no accrual period is longer than one year and each scheduled payment of principal or interest occurs on the first or last day of an accrual period. If you are the initial holder of the debt security, the amount of OID on an OID debt security allocable to each accrual period is determined by:

(i)	multiplying the “adjusted issue price” (as defined below) of the debt security at the beginning of the accrual period by a fraction, the numerator of which is the annual yield to maturity of the debt security and the denominator of which is the number of accrual periods in a year; and

(ii)	subtracting from that product the amount (if any) of qualified stated interest payments allocable to that accrual period.

An OID debt security that is a floating rate debt security will be subject to special rules. Generally, if a floating rate debt security qualifies as a “variable rate debt instrument” (as defined in applicable U.S. Treasury Regulations), then (i) all stated interest with respect to such floating rate debt security will be qualified stated interest and hence included in a U.S. holder’s income in accordance with such U.S. holder’s normal method of accounting for U.S. federal income tax purposes, and (ii) the amount of OID, if any, will be determined under the general OID rules (as described above) by assuming that the variable rate is a fixed rate equal, in general, to the value of the floating rate as of the issue date.

If a floating rate debt security does not qualify as a “variable rate debt instrument,” such floating rate debt security will be classified as a contingent payment debt instrument and will be subject to special rules for calculating the accrual of stated interest and original issue discount.

Any special considerations with respect to the tax consequences of holding a floating rate debt security will be provided in the applicable prospectus supplement.

The “adjusted issue price” of an OID debt security at the beginning of any accrual period will generally be the sum of the debt security’s issue price and the amount of OID previously includable in the gross income of the holder, reduced by the amount of all payments other than any qualified stated interest payments on the debt security in all prior accrual periods. All payments on an OID debt security, other than qualified stated interest,

generally will be viewed first as payments of previously accrued OID (to the extent of the previously accrued discount), with payments considered made from the earliest accrual periods first, and then as a payment of principal. The “annual yield to maturity” of a debt security is the discount rate (appropriately adjusted to reflect the length of accrual periods) that causes the present value on the issue date of all payments on the debt security to equal the issue price. As a result of this “constant yield” method of including OID income, you will generally be required to include in your gross income increasingly greater amounts of OID over the life of an OID debt security.

You generally may make an irrevocable election to include in income your entire return on a debt security (i.e., the excess of all remaining payments to be received on the debt security, including payments of qualified stated interest, over the amount you paid for the debt security) under the constant yield method described above. This election will generally apply only to the debt security with respect to which it is made and may not be revoked without the consent of the IRS. For debt securities purchased at a premium or bearing market discount in your hands, if you make this election you will also be deemed to have made the election (discussed below under the caption “Premium and Market Discount”) to amortize premium or to accrue market discount in income currently on a constant yield basis and such election would apply to all debt instruments with market discount acquired by the electing U.S. holder on or after the first day of the first taxable year to which the election applies. U.S. holders should consult their tax advisors concerning the propriety and consequences of this election.

In the case of an OID debt security that is also a foreign currency debt security, you should determine the U.S. dollar amount includable as OID for each accrual period by (i) calculating the amount of OID allocable to each accrual period in the foreign currency using the constant yield method, and (ii) translating the foreign currency amount so determined at the average exchange rate in effect during that accrual period (or, with respect to an interest accrual period that spans two taxable years, at the average exchange rate for the partial period within each taxable year). Alternatively, you may translate the foreign currency amount so determined at the spot rate of exchange on the last day of the accrual period (or the last day of the accrual period in each taxable year, in the case of an accrual period that spans more than one taxable year) or at the spot rate of exchange on the date of receipt of an amount attributable to OID previously accrued during the accrual period, if that date is within five business days of the last day of the accrual period, provided that you have made the election described under the caption “Payments or Accruals of Interest” above. Because exchange rates may fluctuate, if you are the holder of an OID debt security that is also a foreign currency debt security you may recognize a different amount of OID income in each accrual period than would be the case if you were the holder of an otherwise similar OID debt security denominated in U.S. dollars. Upon the receipt of an amount attributable to OID (whether in connection with a payment of an amount that is not qualified stated interest or the sale or retirement of the OID debt security), you may recognize ordinary income or loss measured by the difference between the amount received, translated into U.S. dollars at the exchange rate in effect on the date of receipt or on the date of disposition of the OID debt security, as the case may be, and the amount accrued, using the exchange rate applicable to such previous accrual.

If you purchase an OID debt security outside of the initial offering at a cost less than its “remaining redemption amount” or if you purchase an OID debt security in the initial offering at a price other than the debt security’s issue price, you will also generally be required to include in gross income the daily portions of OID, calculated as described above. However, if you acquire an OID debt security at a price (i) less than or equal to the remaining redemption amount but (ii) greater than its adjusted issue price, you will be entitled to reduce your periodic inclusions to reflect the premium paid over the adjusted issue price. (As discussed under “Premium and Market Discount” below, if you purchase an OID debt security at a price greater than its remaining redemption amount, the OID rules described in this section will not apply.) The “remaining redemption amount” for an OID debt security is the total of all future payments to be made on the debt security other than qualified stated interest.

Certain of the OID debt securities may be redeemed prior to maturity, either at the option of the Republic or at the option of the holder, or may have special repayment or interest rate reset features as indicated in the pricing supplement. OID debt securities containing these features may be subject to rules that differ from the general

rules discussed above. If you purchase OID debt securities with these features, you should carefully examine the pricing supplement and consult your tax advisor about their treatment since the tax consequences of OID will depend, in part, on the particular terms and features of the debt securities.

OID accrued with respect to an OID debt security will be treated as non-U.S. source income for the purposes of calculating a U.S. holder’s foreign tax credit limitation. The limitation on non-U.S. taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and the timing thereof are complex. You should consult your own tax advisor regarding the availability of a foreign tax credit under your particular situation.

Short-Term Debt Securities

Special rules may apply to a debt security with a maturity of one year or less (“a short-term debt security”). If you are an accrual basis holder, you will be required to accrue OID on the short-term debt security on either a straight line basis or, at the election of the holder, under a constant yield method (based on daily compounding). No interest payments on a short-term debt security will be qualified stated interest. Consequently, such interest payments are included in the short-term debt security’s stated redemption price at maturity. Since the amount of OID is calculated in the same manner as described above under “Original Issue Discount,” such interest payments may give rise to OID (or acquisition discount, as defined below) even if the short-term debt securities are not actually issued at a discount. If you are a cash basis holder and do not elect to include OID in income as it accrues, you will not be required to include OID in income until you actually receive payments on the debt security. However, you will be required to treat any gain upon the sale, exchange or retirement of the debt security as ordinary income to the extent of the accrued OID on the debt security that you have not yet taken into income at the time of the sale. Also, if you borrow money (or do not repay outstanding debt) to acquire or hold the debt security, you may not be allowed to deduct interest on the borrowing that corresponds to accrued OID on the debt security until you include the OID in your income.

Alternatively, regardless of whether you are a cash basis or accrual basis holder, you can elect to accrue any “acquisition discount” with respect to the short-term debt security on a current basis. Acquisition discount is the excess of the stated redemption price at maturity of the debt security over the purchase price. Acquisition discount will be treated as accruing ratably or, at the election of the holder, under a constant yield method (based on daily compounding). If you elect to accrue acquisition discount, the OID rules will not apply. U.S. holders should consult their own tax advisors as to the application of these rules.

As described above, certain of the debt securities may be subject to special redemption features. These features may affect the determination of whether a debt security has a maturity of one year or less and thus is a short-term debt security. If you purchase a debt security, you should carefully examine the pricing supplement and consult your tax advisor about these features.

Premium and Market Discount

If you purchase a debt security at a cost greater than the debt security’s remaining redemption amount, you will be considered to have purchased the debt security at a premium, and you may elect to amortize the premium as an offset to interest income, using a constant yield method, over the remaining term of the debt security. If you make this election, it generally will apply to all debt instruments that you hold at the time of the election, as well as any debt instruments that you subsequently acquire. In addition, you may not revoke the election without the consent of the IRS. If you elect to amortize the premium you will be required to reduce your tax basis in the debt security by the amount of the premium amortized during your holding period. In the case of premium on a foreign currency debt security, you should calculate the amortization of the premium in the foreign currency. Amortization deductions attributable to a period reduce interest payments (or OID) in respect of that period, and therefore are translated into U.S. dollars at the rate that you use for those interest payments (or OID). Exchange gain or loss will be realized with respect to amortized premium on a foreign currency debt security based on the

difference between the exchange rate computed on the date or dates the premium is amortized against interest payments (or OID) on the debt security and the exchange rate on the date when the holder acquired the debt security. For a U.S. holder that does not elect to amortize premium, the amount of premium will be included in your tax basis when the debt security matures or is disposed of. Therefore, if you do not elect to amortize premium and you hold the debt security to maturity, you generally will be required to treat the premium as capital loss when the debt security matures.

A debt security other than a short-term debt security will be treated as purchased at a market discount (a “market discount debt security”) if the debt security’s stated redemption price at maturity or, in the case of an OID debt security, the debt security’s “revised issue price,” exceeds the amount for which the U.S. holder purchased the debt security by at least one-fourth of one per cent (0.25%) of such debt security’s stated redemption price at maturity or revised issue price, respectively, multiplied by the number of complete years from the date acquired by the U.S. holder to the debt security’s maturity. For these purposes, the “revised issue price” of a debt security generally equals its issue price, increased by the amount of any OID that has accrued on the debt security and reduced by the amount of any payments previously made that were not qualified stated interest.

Any gain recognized on the sale or retirement of a market discount debt security will be treated as ordinary income to the extent of the accrued market discount on such debt security. Alternatively, a U.S. holder of a market discount debt security may avoid such treatment by electing to include market discount in income currently over the life of the debt security. Such an election shall apply to all debt instruments with market discount acquired by the electing U.S. holder on or after the first day of the first taxable year to which the election applies. This election may not be revoked without the consent of the IRS.

Market discount on a market discount debt security will accrue on a straight-line basis unless the U.S. holder elects to accrue such market discount on a constant yield method. Such an election shall apply only to the debt security with respect to which it is made and may not be revoked. A U.S. holder of a market discount debt security that does not elect to include market discount in income currently may be required to defer deductions for interest on borrowings incurred to purchase or carry a market discount debt security. Such interest is deductible when paid or incurred to the extent of income from the debt security for the year. If the interest expense exceeds such income, such excess is currently deductible only to the extent that such excess exceeds the portion of the market discount allocable to the days during the taxable year on which such debt security was held by the U.S. Holder. Any accrued market discount on a foreign currency debt security that is currently includable in income will generally be translated into U.S. dollars at the average rate for the accrual period (or portion thereof within the holder’s taxable year). Upon the receipt of an amount attributable to accrued market discount, the U.S. Holder may recognize U.S. source exchange gain or loss (which will be taxable as ordinary income or loss) determined in the same manner as for accrued interest or OID. A U.S. Holder that does not elect to include market discount in income currently will recognize, upon the sale or retirement of the debt securities, the U.S. dollar value of the amount accrued, calculated at the spot rate on that date, and no part of this accrued market discount will be treated as exchange gain or loss.

Disposition of Foreign Currency

Foreign currency received as interest on a debt security or on the sale or retirement of a debt security will have a tax basis equal to its U.S. dollar value at the time the foreign currency is received. Foreign currency that is purchased will generally have a tax basis equal to the U.S. dollar value of the foreign currency on the date of purchase. Any gain or loss recognized on a sale or other disposition of a foreign currency (including its use to purchase debt securities or upon exchange for U.S. dollars) will be U.S. source ordinary income or loss.

Warrants

A description of the tax consequences of an investment in warrants will be provided in the applicable prospectus supplement.

Indexed Debt Securities and Other Debt Securities Providing for Contingent Payments

Special rules govern the tax treatment of debt obligations that provide for contingent payments (“contingent debt obligations”). These rules generally require accrual of interest income on a constant yield basis in respect of contingent debt obligations at a yield determined at the time of issuance of the obligation, and may require adjustments to these accruals when any contingent payments are made. In addition, special rules may apply to floating rate debt securities if the interest payable on the debt securities is based on more than one interest rate index. We will provide a detailed description of the tax considerations relevant to U.S. holders of any debt securities that are subject to the special rules discussed in this paragraph in the relevant prospectus supplement.

Non-U.S. Holders

The following summary applies to you if you are a non-U.S. holder, as defined above.

Subject to the discussion below under the caption “Information Reporting and Backup Withholding,” the interest income that you derive in respect of the debt securities generally will be exempt from U.S. federal income taxes, including U.S. withholding tax on payments of interest (including OID) unless such income is effectively connected with the conduct of a trade or business within the United States. Further, any gain you realize on a sale or exchange of debt securities generally will be exempt from U.S. federal income tax, including U.S. withholding tax, unless:

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your gain is effectively connected with the conduct of a trade or business within the United States; or

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you are an individual holder and are present in the United States for 183 days or more in the taxable year of the sale, and either (i) your gain is attributable to an office or other fixed place of business that you maintain in the United States or (ii) you have a tax home in the United States.

Information Reporting and Backup Withholding

In general, information reporting requirements may apply to certain payments of principal, interest and accruals of OID made within the United States on a debt security, including payments made by the U.S. office of a paying agent, broker or other intermediary, and to proceeds of a sale, exchange, or retirement of a debt security effected at the U.S. office of a U.S. or foreign broker. “Backup withholding” may apply to such payments or proceeds if the beneficial owner fails to provide a correct taxpayer identification number or fails to otherwise comply with the applicable backup withholding rules. Certain persons (including, among others, corporations) and non-U.S. holders which provide an appropriate certification or otherwise qualify for exemption are not subject to the backup withholding and information reporting requirements.

Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules from a payment made to a U.S. holder generally may be claimed as a credit against such holder’s U.S. federal income tax liability provided the appropriate information is furnished to the IRS.

U.S. holders should consult their tax advisors about these rules and any other reporting obligations that may apply to the ownership or disposition of debt securities, including requirements related to the holding of certain foreign financial assets.

Reportable Transactions

A U.S. taxpayer that participates in a “reportable transaction” will be required to disclose its participation to the IRS. Under the relevant rules, if the debt securities are denominated in a foreign currency, a U.S. holder may be required to treat a foreign currency exchange loss from the debt securities as a reportable transaction if this loss exceeds the relevant threshold in the regulations ($50,000 in a single taxable year, if the U.S. holder is an individual or trust, or higher amounts for other non-individual U.S. holders), and to disclose its investment by filing Form 8886 with the IRS. A penalty in the amount of $10,000 in the case of a natural person and $50,000 in all other cases is generally imposed on any taxpayer that fails to timely file an information return with the IRS with respect to a transaction resulting in a loss that is treated as a reportable transaction. Prospective purchasers are urged to consult their tax advisors regarding the application of these rules.

PLAN OF DISTRIBUTION

The Republic may sell the debt securities or warrants in any of three ways:

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through underwriters or dealers;

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directly to one or more purchasers; or

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through agents.

The prospectus supplement relating to a particular series of debt securities or warrants will set out:

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the names of any underwriters or agents;

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the purchase price of the securities;

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the proceeds to the Republic from the sale;

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any underwriting discounts and other compensation;

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the initial public offering price;

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any discounts or concessions allowed, reallowed or paid to dealers; and

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any securities exchanges on which the securities will be listed.

Any underwriter involved in the sale of securities will acquire the securities for its own account. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices to be determined at the time of sale. The securities may be offered to the public either by underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Unless the prospectus supplement states otherwise, the underwriters will benefit from certain conditions that must be satisfied before they are obligated to purchase such securities and they will be obligated to purchase all of the securities if any are purchased. The underwriters may change any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. The underwriters or certain of their affiliates may purchase securities and be allocated securities for asset management and/or proprietary purposes but not with a view to distribution.

If the Republic sells debt securities or warrants through agents, the prospectus supplement will identify the agent and indicate any commissions payable by the Republic. Unless the prospectus supplement states otherwise, all agents will act on a best efforts basis.

The Republic may authorize agents, underwriters or dealers to solicit offers by certain specified entities to purchase the securities from the Republic at the public offering price set forth in a prospectus supplement pursuant to delayed delivery contracts. The prospectus supplement will set out the conditions of the delayed delivery contracts and the commission receivable by the agents, underwriters or dealers for soliciting the contracts.

The Republic may offer securities as full, partial or alternative consideration for the purchase of other securities of the Republic, either in connection with a publicly announced tender, exchange or other offer for such securities or in privately negotiated transactions. The offer may be in addition to or in lieu of sales of securities directly or through underwriters or agents.

Agents and underwriters may be entitled to indemnification by the Republic against certain liabilities, including liabilities under the Securities Act of 1933, or to contribution from the Republic with respect to certain payments which the agents or underwriters may be required to make. Agents and underwriters may be customers of, engage in transactions with, or perform services (including commercial and investment banking services) for, the Republic in the ordinary course of business.

In compliance with Financial Industry Regulatory Authority guidelines, the maximum compensation to any underwriters or agents in connection with the sale of any securities pursuant to the prospectus and applicable prospectus supplements will not exceed 8% of the aggregate total offering price to the public of such securities as set forth on the cover page of the applicable prospectus supplement; however, it is anticipated that the maximum compensation paid will be significantly less than 8%.

Unless otherwise specified in the applicable prospectus supplement, if the Republic offers and sells securities outside the United States, each underwriter or dealer will acknowledge that:

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the securities offered have not been and will not be registered under the Securities Act of 1933; and

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the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. Each participating underwriter or dealer will agree that it has not offered or sold, and will not offer or sell, any debt securities constituting part of its allotment in the United States except in accordance with Rule 903 of Regulation S under the Securities Act of 1933. Accordingly, each underwriter or dealer will agree that neither the underwriter nor dealer nor its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the securities.

VALIDITY OF THE SECURITIES

The Secretary of the Department of Justice of the Republic will provide an opinion on behalf of the Republic as to the validity of the securities under Philippine law. Linklaters Singapore Pte. Ltd., United States counsel for the Republic, will provide an opinion on behalf of the Republic as to the validity of the securities under U.S. and New York State law. U.S. and Philippine counsel named in the applicable prospectus supplement will provide an opinion as to certain legal matters on behalf of the underwriters named in the applicable prospectus supplement.

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES

The authorized agent of the Republic in the United States is Kerwin Orville C. Tate, Deputy Consul General, the Philippine Consulate General, 556 Fifth Avenue, New York, New York 10036-5095.

EXPERTS; OFFICIAL STATEMENTS AND DOCUMENTS

Information contained herein that is identified as being derived from a publication of the Republic or one of its agencies or instrumentalities is included herein on the authority of such publication as an official public document of the Republic. All other information contained herein is included as an official public statement made on the authority of Rosalia de Leon, the Treasurer of the Philippines.

FURTHER INFORMATION

The Republic has filed a registration statement for the securities with the SEC under the Securities Act of 1933. This prospectus does not contain all of the information described in the registration statement. For further information, you should refer to the registration statement.

The Republic is not subject to the informational requirements of the Securities Exchange Act of 1934. The Republic commenced filing annual reports on Form 18-K with the SEC on a voluntary basis beginning with its fiscal year ended December 31, 2016. These reports include certain financial, statistical and other information concerning the Republic. The Republic may also file amendments on Form 18-K/A to its annual reports for the purpose of filing with the SEC exhibits which have not been included in the registration statement to which this prospectus and any prospectus supplements relate. When filed, these exhibits will be incorporated by reference into this registration statement.

You can request copies of the registration statement, including its various exhibits, upon payment of a duplicating fee, by writing to the SEC. You may also read and copy these documents at the SEC’s public reference room in Washington, D.C. or over the Internet at www.sec.gov.

SEC Public Reference Room

100 F Street, N.E.

Washington, D.C. 20549

Please call the SEC at 1-800-SEC-0330 for further information.

The SEC allows the Republic to incorporate by reference some information that the Republic files with the SEC. Incorporated documents are considered part of this prospectus. The Republic can disclose important information to you by referring you to those documents. The following documents, which the Republic has filed or will file with the SEC, are considered part of and incorporated by reference in this prospectus, any accompanying prospectus supplement and any accompanying pricing supplement:

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the Republic’s annual report on Form 18-K for the year ended December 31, 2019 filed with the SEC on October 30, 2020 (the “2019 Annual Report”);

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Amendment No. 1 filed on Form 18-K/A on November 20, 2020, to the 2019 Annual Report; and

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each subsequent annual report on Form 18-K and any amendment on Form 18-K/A filed on or after the date of this prospectus and before all of the debt securities and warrants are sold.

Later information that the Republic files with the SEC will update and supersede earlier information that it has filed.

ISSUER

Republic of the Philippines

Department of Finance, Office of the Secretary

Department of Finance Building

BSP Complex

Manila

Republic of the Philippines

LEGAL ADVISORS TO THE REPUBLIC OF THE PHILIPPINES

As to U.S. federal and New York State law:

Linklaters Singapore Pte. Ltd.

One George Street #17-01

Singapore 049145

As to Philippine law:

Department of Justice

Padre Faura Street

Malate,

Manila

Republic of the Philippines

LEGAL ADVISORS TO THE UNDERWRITERS

As to U.S. federal and New York State law:

Cleary Gottlieb Steen & Hamilton (Hong Kong)

37^th Floor, Hysan Place

500 Hennessy Road

Hong Kong

As to Philippine law:

Romulo Mabanta Buenaventura

Sayoc & de los Angeles

Corporate Banking & Finance

21^st Floor, Philamlife Tower

8767 Paseo de Roxas

Makati City

Republic of the Philippines


FISCAL AGENT, REGISTRAR, TRANSFER AGENT AND PRINCIPAL PAYING AGENT		LUXEMBOURG LISTING AGENT

The Bank of New York Mellon 240 Greenwich Street New York, New York 10286 United States of America		The Bank of New York Mellon SA/NV, Luxembourg Branch Vertigo Building—Polaris 2-4 rue Eugène Ruppert L-2453 Luxembourg


LUXEMBOURG PAYING AND TRANSFER AGENT		LONDON PAYING AGENT

The Bank of New York Mellon SA/NV, Luxembourg Branch		The Bank of New York Mellon, London Branch
Vertigo Building—Polaris		One Canada Square
2-4 rue Eugène Ruppert		London E14 5AL
L-2453 Luxembourg		United Kingdom

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