Private sector bond issuances post 129% growth from 2016 to present

Corporate bond issuances more than doubled since the Duterte administration took over in 2016, from P645.6 billion of listed private debt securities to P1.48 trillion as of end-August this year, according to a report by the Philippine Dealing and Exchange Corp. (PDEX) to the Capital Market Development Council (CMDC).

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, PDEX president and Chief Operating Officer (COO) Antonino Nakpil 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.

Nakpil’s report to the CDMC 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,” said Nakpil in his report during a recent CDMC meeting. "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."

The CDMC is co-chaired by Finance Secretary Carlos Dominguez III, lawyer Benedicta Du-Baladad of the Financial Executives Institute of the Philippines (FINEX) and Securities and Exchange Commission (SEC) Chairperson Emilio Aquino.

“That is pretty good. So basically from 2016 to 2020 we more than doubled,” Dominguez said at the meeting.

Nakpil said that 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.

Among its members are National Treasurer Rosalia de Leon, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi Fonacier, Insurance Commission (IC) Deputy Commissioner George Ongkeko, BSP Managing Director Lyn Javier, Securities and Exchange Commission (SEC) Commissioner Ephyro Luis Amatong, Philippine Dealing System Holdings Corp. (PDS) president Ma. Theresa Ravalo, Investment House Association of the Philippines (IHAP) president Robert Lehmann, Philippine Association of Securities Brokers and Dealers, Inc. (PABDI) president Ismael Cruz and Wick Veloso of the Bankers Association of the Philippines (BAP).