Corporate bonds issuance more than double since 2016

MANILA, Philippines — Bonds issued by corporations more than doubled since 2016, indicating a “very active” primary market in the country, the Department of Finance (DOF) said yesterday.

Citing a report made by Philippine Dealing and Exchange Corp. (PDEX) president and chief operating officer Antonino Nakpil to the Capital Market Development Council (CMDC), the DOF said outstanding corporate bond issuances reached P1.48 trillion as of end-August, a notable 129 percent increase from P645.6 billion in 2016.

“The primary market has been very active,” said Nakpil said during a recent CMDC meeting. “We actually hit P1.53 trillion, but there were some maturities and the outstanding level as of   end-August was at P1.48 trillion.”

Nakpil said outstanding amount of bonds listed by the private sector showed a steady rise since 2016, reaching P792.5 billion in 2017, P1.05 trillion in 2018 and P1.32 trillion in 2019.

In terms of new corporate bond listings, a total of P136.5 billion worth of bonds were issued in 2016, P207.4 billion in 2017, P256.4 billion in 2018, and a record-high of P375.6 billion in 2019, the official said.

“As of August this year, we are at P295 billion so it is still quite positive. Although for this particular period, what is active are the one- to three-year short tenors,” Nakpil said. `

He said the financial sector has led the activity since 2018, now accounting for 43 percent of the total corporate bonds listed.

This was followed by the property market (24 percent), holding firms (15 percent), the industrial market (13 percent) and consumer staples (two percent).

Composed of representatives from the public and private sector, the CMDC is a coordinating body tasked to facilitate the development of the Philippine capital market.

It is co-chaired by Finance Secretary Carlos Dominguez, lawyer Benedicta Du-Baladad of the Financial Executives Institute of the Philippines (FINEX) and Securities and Exchange Commission (SEC) chairperson Emilio Aquino.

Despite the COVID-19 outbreak, a number of private companies still proceeded with their respective fund-raising activities.

Just recently, the SEC gave SM Investments Corp. the green light to issue as much as P30 billion worth of bonds. It also approved Del Monte Philippines Inc.’s fixed-rate bond offering amounting to P7.5 billion.

In the financial sector, Bank of the Philippine Islands last August raised P21.5 billion through its first-ever COVID-19 bond offering in the domestic market.

Last week, China Bank Corp. said its recent bond offering also raised P15 billion in funds amid strong demand from the investing public.