Expectation of strong domestic bond market in 2024
THE PHILIPPINE Dealing & Exchange Corp. ( PDEx) is on track to achieve its domestic bond listings target for the year, signaling a promising revival for the corporate bond sector. Antonino Nakpil, President and CEO of PDEx, expressed confidence in the market’ s resilience, highlighting a stark contrast from its performance in the previous year.
Nakpil proudly declared, “Thus far, we have witnessed three notable listings: a) BDO - P63.3 Billion, marking the largest single issue by a private firm and the largest Sustainability Bond ever issued in the Philippines, b) FDC - P10 Billion, which was also oversubscribed with tenders reaching P30 billion, and c) DBP - P8.75 Billion, limited to Qualified Investors rather than a public listing.”
“The cumulative year- to- date total stands at P82.05 billion,” Nakpil disclosed, noting a potential pause as the market anticipates a significant Retail Treasury Bond from the BTr, scheduled to be priced on Tuesday, February 13, 2024.
Additionally, Nakpil emphasized the robust trading activity of debt securities in the secondary market, averaging between P29.50 to P30 billion daily.
He fore sees a substantial increase in capital raised through corporate bond issuance compared to last year’s P209.33 billion, with a target of nearly doubling the figure to around P400 billion for 2024.
Nakpil attributes this anticipated growth to upcoming bond maturities, particularly in the banking sector, which often prompts bond reissuance due to favorable reserve requirements. “We anticipate renewed interest from banks,” Nakpil remarked, highlighting banks’ strategic advantage in timing their bond offerings.
In 2023, domestic corporate bond market issuances experienced a significant decline of 58.8%, falling to P209.33 billion from the record high of P508.66 billion in 2022, primarily due to increased uncertainties.
BPI’s Green Solutions Initiative
Recently, the Bank of the Philippine Islands( B PI) launched its Green Solutions initiative, introducing financing options tailored specifically for eco-friendly housing and transportation, further affirming its commitment to sustainable finance.
Dexter Lloyd Cuajotor, head of B PI’ sr eta ill ending and bancassurance, emphasized, “BPI Green Solutions offers tailored financial solutions for housing and auto loans, enhancing accessibility and affordability for sustainable homes and electric vehicles in the market.”
Cuajotor elaborated on the range of financing options available, including Solar Mortgage for those interested in solar-powered homes, EcoBuild Financing for sustainable construction projects, and EV Financing to promote the adoption of electric vehicles.
Compared to conventional housing and auto loans, green loans offer more flexible payment schemes and discounts under BPI’s All Out Promo, available until March 31.
As the first bank in the country to provide financing options for eco- friendly housing and mobility, BPI underscores its commitment to sustainable finance, according to Eric Luchangco, BPI’s Chief Financial Officer and concurrent Chief Sustainability Officer.
Luchangco emphasized that the program reflects BPI’s steadfast dedication to responsible banking, benefiting its customers, investors, and communities alike. Since 2019, BPI has expanded its green f i nancing program to i nclude sustainable agriculture alongside initiatives in renewable energy efficiency and climate resilience. Moreover, BPI is on track to reduce its coal power loan portfolio to 50% by 2026, with the ultimate goal of complete elimination by 2032.