The Philippines’ total local currency (LCY) bonds outstanding as of June reached P11.7 trillion amid expansions in both the corporate and government bond markets, according to a report released by the Asian Development Bank (ADB) yesterday.
The total LCY bonds recorded a quarter-on-quarter increase of 1.3 percent, according to the Asia Bond Monitor.
Treasury and other government bonds grew 2.3 percent quarter-on-quarter as issuances exceeded maturities, while central bank securities contracted 15.8 percent versus the previous quarter due to a decline in issuance in the second quarter of 2023 amid easing inflation, the ADB said.
The corporate bond market also rose 1.2 percent quarter-on-quarter due to the large volume of issuances during the quarter, a reversal from the 2.2 percent contraction in the first quarter of 2023.
The ADB reported that the Philippine corporate bond market remained dominated by the property, banking and holding firms sectors, which accounted for a collective share of 81 percent of total corporate bonds outstanding at the end of the second quarter.
Meanwhile, the report also mentioned that LCY government bond yields in the Philippines increased for most tenors between June 1 and August 31, with only the one-month and three-month tenors posting declines during the review period.
“The increase in yields was influenced by the Bangko Sentral ng Pilipinas’ hawkish tone amid persistent elevated inflation despite a continued decline since February,” the report said.
“In addition, an increase in yields was also influenced by dampened investor sentiment due to the economy’s slower-than-expected growth of 4.3 percent year-on-year in the second quarter of 2023, down from 6.4 percent year-on-year in the previous quarter,” the report added.
