Bond issuances to hit target – PDEx
PHILIPPINE Dealing and Exchange Corp. (PDEx) is optimistic that corporate bond issuances will reach the P400-billion target this year following sluggish results in 2023, a top executive said.
The corporate bond market this year will be “more robust” compared to last year, PDEx President and Chief Executive Officer Antonino Nakpil said in a recent interview.
“There’s a lot of maturities that are going to occur. The banks, in particular, usually have an incentive to reissue their bonds again. It’s cheaper in terms of the reserve requirements,” he added.
“That will be driving the [growth]. We believe the banks are coming back and some of the corporations will come back. That’s part of the environment.”
Capital raised through bond issuances in 2023 amounted to P209 billion, Nakpil noted, adding that they expect to exceed that figure and meet this year’s target, which is lower than 2022’s all-time high of P508 billion.
Last week, PDEx listed Filinvest Development Corp.’s P10 billion worth of fixed-rate retail bonds due in 2026. This was the first corporate bond listing under a five-year tenor, he added.
Nakpil said that PDEx would be conducting another bond listing ceremony this week for state-owned Development Bank of the Philippines.
“We started with P70 [billion] plus within February. We’ll be at P82 [billion] after next week. So, it’s a very good start for the first quarter,” he pointed out.
Given that interest rates have not started going down, the PDEx executive said that some firms, particularly banks, would likely opt for a shorter term for their bonds.
“The banks, definitely, have always been very tactical on that. They are very astute when it comes to timing,” he said.
While bigger companies are expected to issue bonds this year, Nakpil said the goal is to encourage more micro, small and medium-sized enterprises to do the same.
“The mission of the capital market infrastructure is to have more issuers have access to capital. Capital should move around to all issuers,” he added.