The amount of local currency (LCY) bonds outstanding in the Philippine market fell 0.8 percent quarter-on-quarter in the fourth quarter of 2019, led by a decline in the outstanding stock of government bonds, a report published by the Asian Development Bank (ADB) said.
According to the latest Asia Bond Monitor released yesterday, the outstanding LCY bonds in the fourth quarter of the previous year amounted to P6.65 trillion, down from the previous quarter’s level of P6.7 trillion.
On a year-on-year basis, the Philippine LCY bond market grew nine percent from the previous year’s level of P6.1 trillion.
Philippine government bonds fell 2.1 percent quarter-on-quarter to P5.14 trillion, as both treasury bills and treasury bonds registered declines in the fourth quarter.
However, it saw an increase of 7.5 percent from the previous year.
“A huge volume of treasury bills and bonds matured in Q4 2019, reducing the stock of government bonds outstanding despite a hefty issuance volume during the quarter,” the report said.
The Philippine LCY corporate bond market expanded four percent quarter-on-quarter to P1.5 trillion due to higher issuance during the quarter.
It also saw a 14.5 percent increase from the issuances in the same period in 2018.
“The stock of corporate bonds rose four percent q-o-q in Q4 2019 amid strong issuance,” the report said.
Meanwhile, the ADB said the coronavirus disease 2019 (COVID-19) pandemic and deepening global economic uncertainty are weighing heavily on local currency bond markets of emerging East Asian economies.
“Financial markets in the region are already feeling the brunt of the effects of the COVID-19 pandemic, with foreign investment and sector activities on the downside, coupled with ongoing trade issues,” Yasuyuki Sawada, ADB chief economist, said in a statement.
“Efforts to cushion the negative impacts of the pandemic through stimulus packages and monetary measures to support affected households, businesses, and financial markets should continue,” he added.
The report said developing Asian economies with strong trade and production linkages with the People’s Republic of China, such as Hong Kong, China; Singapore; Vietnam; and the Philippines, will also be materially affected by the COVID-19 outbreak.
