Corporate bond issuances up 129%

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    Corporate bond issuances more than doubled since the Duterte administration took over in 2016, according to a report by the Philippine Dealing and Exchange Corp. (PDEX) to the Capital Market Development Council (CMDC).

    Citing the report, the Department of Finance (DOF) said in a statement yesterday private sector bond issuances rose from P645.6 billion of listed private debt securities to P1.48 trillion as of end-August this year.

    This increase in the amount of listed private sector bonds represents a growth of 129 percent, indicating an active primary market dominated by financial institutions, Antonino Nakpil, PDEX president and chief operating officer, said in his report.

    From P645.6 billion in 2016, the outstanding amount of bonds listed by the private sector rose to P792.5 billion in 2017, P1.05 trillion in 2018, and P1.32 trillion in 2019, Nakpil said.

    The CMDC is co-chaired by Carlos Dominguez, DOF secretary; Benedicta Du-Baladad of the Financial Executives Institute of the Philippines; and Emilio Aquino, Securities and Exchange Commission chairperson.

    “That is pretty good. So basically from 2016 to 2020 we more than doubled,” Dominguez said during a recent CMDC meeting.

    Nakpil’s report to the CMDC also showed a steady rise in the amount of listed corporate bonds since 2008.

    From 2018, the financial sector has led the activity and at present, financials now account for 43 percent of total corporate bonds listed. This is followed by the property market (24 percent), holding firms (15 percent), the industrial market (13 percent) and consumer staples (2 percent).

    “The primary market has been very active,” Nakpil said.

    “We actually hit P1.53 trillion but there were some maturities and the outstanding level as of the end of August was at P1.48 trillion,” he added.

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

    “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.

    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. (A. Celis)