SEC sees more investments in infrastructure bonds this year

The Securities and Exchange Commission (SEC) expects this year more companies engaged in infrastructure developments to issue project bonds to fund expansion, boosting the coun­try’s focus on improving infrastructure.

SEC chairperson Teresita Herbosa said they are encouraging the issuance of long-term infrastructure bonds, as most listed companies have already availed of the SEC’s shelf registration program.

“We’re going into infrastructure bonds, these are long term, more than 10 years,” she told re­porters.

Herbosa also hopes that companies engaged in agricul­ture and manufacturing sectors will also issue project bonds.

The issuance of infrastruc­ture bonds is expected to boost infrastructure developments in the country.

The Duterte administration expects P8 trillion to P9 trillion in infrastructure investments from 2017 to 2022.

Meanwhile, Herbosa said the Commission is looking to enhance its shelf registration program.

“Well, now we have three years. But I don’t know if we can extend that. But three years look sufficient for the issuers…” she said. “The market looks good plus I think maybe rather go to the bank, of course borrowing from the banks have limitations, they (companies) will raise pub­licly.”

The SEC attributed the significant boost in corporate bond issuance to the enhanced shelf registration program under the 2015 Securities Regulation Code implementing rules and regulations.

Under the shelf registra­tion program, securities may be registered for an offering to be made on a continuous or de­layed basis, or in tranches, for a period not exceeding three years.

Capital raising can be done by issuers as they are needed and/or when market conditions are favorable for them.