Philippines bond market 2nd fastest growing in East Asia in Q1

MANILA, Philippines — The Philippine bond market posted the second fastest growth in the East Asia region in the first quarter of 2019, driven by aggressive government and corporate borrowings, the latest bond monitor report of the Asian Development Bank (ADB) showed.

The quarterly Asia Bond Monitor showed that the country’s outstanding local currency (LCY) bond market amounted to P6.588 trillion ($125 billion) at the end of the first three months of the year, up by 17.8 percent year-on-year and by eight percent quarter-on-quarter.

This growth rate was markedly faster than the 13.1 percent year-on-year growth and 2.1 percent quarter-on-quarter growth in the first quarter of 2018. This compares with outstanding amounts of P5.593 trillion in the first quarter of 2018 and P6.098 trillion in the fourth quarter of 2018.

“The increase was supported by growth in both the government and growth in both the government and corporate bond markets,” the report said.

Outstanding government bonds stood at P5.203 trillion as of end-March 2019 ($99 billion), up by 16.2 percent year-on-year and by eight percent quarter-on-quarter.

ADB noted that in responding to high demand, the Bureau of Treasury (BTr) issued more than the programmed auction amounts for Treasury bills and bonds in January with the proceeds meant to fund increased spending for social services and infrastructure.

Corporate bonds, meanwhile, amounted to P1.385 trillion, ($26 billion) ending the first quarter, up by 24.4 percent year-on-year and 5.4 percent quarter on quarter.

By sector, the issuers were banking, property, and holding firms. These same sectors dominated the issuances for LCY corporate bonds in the first quarter of 2018.

Property developer Ayala Land continued to lead the top 30 issuers in terms of outstanding LCY corporate bonds at the end of March with P109.6 billion issued. BDO, the country’s largest bank, and SM Prime Holdings, another property developer, followed with P94 billion and P93.7 billion, respectively.