Banks raise P116 billion from debt market

MANILA, Philippines — Philippine banks raised P116 billion by tapping the domestic debt market via the issuance of bonds as well as long-term negotiable certificates of deposits (LTNCDs) in the first quarter of the year to support asset expansion and diversify funding sources.

Data from the Philippine Dealing and Exchange Corp. (PDEx) showed eight banks raised capital via the domestic debt market from January to March this year.

The amount raised by the banking sector accounted for 80 percent of the P150 billion total listed securities.

Ayala-led Bank of the Philippine Islands (BPI) raised a total of P49.17 billion via the issuance of two-year fixed rate bonds worth P15.33 billion last January and another fixed rate bonds due 2021 worth P33.89 billion last month.

BDO Unibank Inc. of the Sy family raised a record P40.1 billion via the issuance of 2.5-year fixed rate bonds last February.

Other banks that tapped the onshore debt market include Aboitiz-led Union Bank of the Philippines with P6.8 billion, San Miguel’s Bank of Commerce with P5.03 billion, Philippine National Bank of tobacco and airline magnate Lucio Tan with P4.65 billion, Philippine Savings Bank with P4.65 billion, Gotianun-led East West Banking Corp. and Security Bank Corp. with P2.07 billion.

Philippine banks have been tapping both the onshore and offshore debt markets to raise much needed funds to finance expansion activities as well as future asset growth.

Debt issuance by banking sector jumped 132.5 percent to P268.98 billion last year from P115.7 billion in 2018. It accounted for 71.8 percent of the all-time high P375.61 billion raised via the fixed income market last year.