The Market Monitor Minding the Nation's Business
The Philippine local currency bond market saw significant growth in the third quarter of 2024, driven by strong performance across all bond segments, according to the latest report from the Asian Development Bank (ADB).
In its Asia Bond Monitor report released Wednesday, the ADB noted that total bonds outstanding rose to P13 trillion, reflecting a 3.8 percent quarter-on-quarter increase. This acceleration marked a stronger expansion compared to the 1.9 percent growth observed in the previous quarter.
“Growth in the LCY bond market accelerated in the third quarter of 2024 on robust expansion in all bond segments,” the ADB stated.
Government bonds saw a 3.6 percent quarterly increase as the government ramped up borrowing to meet high maturity volumes. Corporate debt, too, saw a recovery, rising by 3.1 percent, reversing the 7.7 percent decline in the second quarter.
This rebound came after the Bangko Sentral ng Pilipinas (BSP) eased its policy rates in August, encouraging corporate issuers to return to the market.
The ADB also highlighted a notable 11 percent quarterly increase in local currency bond issuance, reaching P2.9 trillion, a sharp recovery from the previous quarter’s contraction of 15.7 percent. “LCY bond issuance rebounded in Q3 2024, propelled by lowered interest rates,” the report said.
Treasury and other government bond issuance surged by 34 percent quarter-on-quarter, driven by the government’s efforts to raise funds amid significant bond maturities. Corporate bond issuance also saw a dramatic rise, more than tripling to P165.4 billion from P43.1 billion in the previous quarter, thanks to the falling borrowing costs.
Among the largest corporate bond issuances during the period were those from BDO Unibank, which raised P55.7 billion through a 1.5-year sustainability bond, and the Bank of the Philippine Islands, which issued a similar bond worth P33.7 billion.