Bonds, debt issues by banks more than double to P260 billion

MANILA, Philippines — Philippine banks have raised P259.8 billion via the issuance of bonds and other debt instruments in the domestic market this year, more than double the P115.7 billion issued last year, as part of efforts to augment their loan books and bankroll their respective expansion programs.

Banks issued P223.78 billion worth of fixed rate bonds, Series A bonds, ASEAN green bonds and ASEAN sustainability bonds. Financial institutions also raised P35.82 billion via the issuance of long-term negotiable certificates of deposits (LTNCDs).

The debt papers were listed on the platform of the Philippine Dealing and Exchange Corp. (PDEx). The financial sector accounted for 71 percent of the total P363.3 billion bonds from 38 listings this year.

Another bank is expected to list at PDEx before the end of the year.

BDO Unibank Inc., the country’s largest lender, has raised P48.82 billion through the issuance of bonds and LTNCDs.

The listed bank owned by the family of the late retail and banking magnate Henry Sy issued P35 billion worth of senior fixed rate bonds due 2020, P7.32 billion worth of LTNCDs due 2024, and P6.5 billion worth of LTNCDs due 2025.

On the other hand, Metropolitan Bank & Trust Co. (Metrobank), the second largest bank in the country founded by the late taipan George SK Ty also raised a total of P42.5 billion. It issued P17.5 billion through the issuance of fixed rate bonds due 2022 as well as P25 billion worth of Series A bonds due 2021 and 2023.

Rizal Commercial Banking Corp. (RCBC) of the late tycoon Alfonso Yuchengco issued P30.5 billion worth of bonds. It became the first bank to issue fixed rate ASEAN green bonds due 2020 worth P15 billion, ASEAN sustainability bonds worth P8 billion, and fixed rate bonds due 2022 worth P7.5 billion.

Sy-led China Bank issued fixed rate bonds worth P30 billion, while Philippine National Bank (PNB) of tobacco and airline magnate Lucio Tan raised P26.69 billion consisting of P20.17 billion worth of bonds and P12.82 billion worth of LTNCDs.

Other banks that issued debt papers in the domestic bond market this year include Security Bank with P24.06 billion, state-run Development Bank of the Philippines with P18.25 billion worth of ASEAN sustainability bonds, Gokongwei-led Robinsons Bank with P10 billion, Ayala-owned BPI Family Savings Bank with P9.6 billion, Ty-led Philippine Savings Bank with P6.3 billion, Aboitiz-led Union Bank of the Philippines, and Ayala-led Bank of the Philippine Islands with P3.12 billion.

The Bangko Sentral ng Pilipinas (BSP) has issued moratorium on the issuance of LTNCDs effective January 2021 prompting banks to shift to the issuance of bonds and commercial paper to raise much needed cash.

LTNCDs are attractive negotiable certificates of deposit with a designated maturity, and represent a bank’s obligation to pay the face value upon maturity, with periodic coupon or interest payments during the life of the deposit.

PDEx said the financial sector account for 39 percent or P516 billion of the outstanding listed bonds amounting to P1.31 trillion.