Corporate bonds issuances double since 2016 – CMDC

The country’s corporate bond issuances more than doubled since the Duterte administration took office, the Capital Market Development Council (CMDC) said.

Based on the report by the Philippine Dealing and Exchange Corp. (PDEX) to CMDC, the total listed private debt securities grew by 129 percent to ₱1.48 trillion at endAugust this year from only ₱645.6 billion in 2016.

Since President Duterte took over, the outstanding amount of bonds listed by the private sector rose to ₱792.5 billion in 2017, ₱1.05 trillion in 2018, and ₱1.32 trillion in 2019, the PDEX report showed.

According to Antonino Nakpil, PDEX president and chief operating officer, listed domestic bonds were able to sustain the growth momentum since 2008.

From 2018, the financial sector has led the activity and now accounts for 43 percent of total corporate bonds listed, 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 ₱1.53 trillion but there were some maturities and the outstanding level as of the end of August was at ₱1.48 trillion."

The CDMC is co-chaired by Finance Secretary Carlos G. Dominguez III, 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 ₱136.5 billion worth of bonds were issued in 2016, which grew to ₱207.4 billion in 2017, ₱256.4 billion in 2018, and reached a record-high ₱375.6 billion in 2019.

“As of August this year we are at ₱295 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 Deputy Commissioner George Ongkeko, BSP Managing Director Lyn Javier, and SEC Commissioner Ephyro Luis Amatong.