The Philippines’ local currency (LCY) bond market accelerated in the third quarter of 2024 amid the robust expansion in all bond segments, according to a report released by the Asian Development Bank (ADB).
The latest issue of the Asia Bond Monitor showed the Philippines’ total LCY bonds outstanding reached P13 trillion at the end of September on accelerated growth of 3.8 percent quarter-on-quarter (q-o-q).
Treasury and other government bonds grew by 3.6 percent q-o-q on increased borrowing amid a high volume of bond maturities during the quarter.
The total corporate debt stock rebounded to expand 3.1 percent q-o-q in the third quarter of 2024 from the previous quarter’s contraction, as corporates increased their issuance after the central bank’s policy easing in August, the ADB said.
The report said total LCY bond issuance grew 11 percent q-o-q to P2.9 trillion in the third quarter alone, a reversal from the previous quarter’s 15.7 percent q-o-q contraction.
“Due to the government’s increased borrowing amid a large amount of maturities during the quarter, the issuance of Treasury and other government bonds increased 34. percent q-o-q in Q3 2024,” the report said.
“Similarly, corporate bond issuance increased more than three-fold to P165.4 billion, from P43.1 billion in the previous quarter, amid declining borrowing costs,” it added.
The largest corporate bond issuances during the quarter came from BDO Unibank, which issued a 1.5-year sustainability bond worth P55.7 billion, and Bank of the Philippine Islands, which also issued a 1.5-year sustainability bond worth P33.7 billion.
These issuances represented 33.7 percent and 20.4 percent of the Philippines’ total corporate issuance in the third quarter of 2024, respectively.
Meanwhile, the ADB Institute also released a separate report yesterday titled, Designing Competition Policy for Economic Development in Asia and the Pacific, which, among others, identified challenges to competition enforcement in the Philippines.
“Under its competition enforcement function, the PCC (Philippine Competition Commission) has encountered several challenges that have served as critical lessons for a young competition authority,” the report said.
Among these, the report said the PCC’s case teams have encountered difficulties in obtaining data from sector regulators and other government agencies.
“This has been the case, despite having memoranda of agreement with other agencies that should facilitate the sharing of data and information,” the report said.
The report said collaboration with other government agencies requires the establishment of networks and data infrastructure that can be used to inform investigations in a timely manner.
The publication likewise noted that existing relationships between private parties in oligopoly settings and governments, particularly sector regulators complicate the prosecution of competition cases.
“In countries with weak institutions, such as the Philippines, there have been incidents when a government entity, possibly unaware of its own anti-competitive policies and decisions and thinking that it would benefit the public if competitors agreed on a price, ends up sanctioning and “legitimizing” the cartel,” the report said. “Of course, it may very well be the case that regulatory capture is possible, whereby anti-competitive practices are enabled by captured policymakers through the granting of economic privileges to specific entities,” it added.
