Philippines bond market recovers in Q1 – ADB

MANILA, Philippines — The Philippine bond market bounced back in the first quarter, rising by over four percent, supported by an increase in government issuances, according to the Asian Development Bank (ADB).

The multilateral lender’s Asia Bond Monitor June 2025 report showed that the Philippines’ local currency bond stock rebounded in the first quarter, reaching P13.5 trillion and posting a 4.1-percent quarter-on-quarter growth.

This marked an improvement from the previous quarter’s 0.6-percent contraction.

The ADB attributed the growth to “a rebound in Treasury and other government bonds, which rose by 4.1 percent due to increased government borrowing.”

Among all types of bonds, the ADB said central bank securities posted the fastest growth at 15.3 percent in the first quarter, reversing the previous quarter’s 11.7-percent decline.

Meanwhile, the ADB reported that corporate debt stock contracted by 2.8 percent due to high volume of maturities.

Local currency bond issuance in the country also recovered in the first quarter, posting a 13.7-percent increase to P2.7 trillion.

The growth was driven mainly by government bond issuance, which surged by almost 99 percent in the first quarter as the government front-loaded its borrowing for the year.

Corporate bond issuance rose by 20.6 percent in the first quarter, a turnaround from the previous quarter’s 63 percent plunge, as firms raised funds to refinance maturing debt.

SM Prime Holdings Inc. was the biggest corporate bond issuer in the first quarter with P25 billion or 34 percent of the total corporate issuance during the period.

While banks, investment houses and contractual savings institutions continued to dominate the country’s local currency government bond market as they held about 75 percent of the debt stock in the first quarter, their holdings were down from 78 percent in the same period last year.

Meanwhile, the share of bonds held by brokers, custodians and depositories rose to 10.4 percent in the first quarter from 7.8 percent in the same period in 2024.

The report also showed that total outstanding sustainable bonds in the Philippines climbed by 20.6 percent to $13.6 billion in the first quarter.

“The Philippines’ sustainable bond market is among the smallest in emerging East Asia, comprising only two percent of the region’s total,” the ADB said.

Close to 55 percent of the country’s total sustainable debt stock was issued by the government. Of the total, more than 70 percent is denominated in foreign currency.