RP bond market grew fastest in region–ADB

The sale of local currency-denominated bonds or debt papers in the country accelerated in the first quarter of the year—which was seen as the highest in the region—as the government implemented a fiscal stimulus program to offset economic slowdown while private firms raised funds for their respective expansion programs, the Asian Development Bank (ADB) said.

In its Asia Bond Monitor, the Manila-based lender said the Philippine bond market from January to March rose 7.8 percent to $60 billion from $56 billion in the same period last year.

Quarter-on-quarter, the country’s bond issuances inched up by 0.1 percent.

The ADB said new issues of peso-denominated government bonds rose to $56 billion from January to March from $51 billion in the same period.

Corporate bonds, on the other hand, dipped to $4 billion during the period from $5 billion.

The country’s bond market growth during the period was faster than its neighbors like Vietnam, which grew by only 3.7 percent; Malaysia, 0.9 percent; Indonesia, 7.3 percent and Thailand, 6.5 percent. Korea’s bond market growth, on the other hand, was higher compared with the Philippines at 10.3 percent.

Overall, the ADB said the region’s local currency bond issuance in first quarter rose by 14 percent quarter-on-quarter, reflecting the revival of issuance in equal measure in both the government and corporate sectors.

The most rapid increase in issuance came out of the Philippines, where Treasury-bond issuance in first quarter jumped to P168 billion from P6.2 billion in the previous quarter while Treasury bill-issuance remained at a relatively high level of P130 billion, the lender said.

Philippine corporate issuance in first quarter rose to P33.5 billion from P22.6 billion in the fourth quarter of last year.

The ADB added that most government bond yield curves in the region have steepened and are still wider than they were at the end of December last year.

It said only Vietnam and Indonesia, where bonds with maturities under 14 years, are below their end-December levels. Elsewhere, the best outcome is that the shorter end of the government bond curve has moved below end-December levels, resulting in an overall steepening for most bond yield curves in the region.

“This reflects lingering economic and financial market uncertainty, as well as market concern about further bond issuance to finance economic stimulus programs,” the ADB said. — Darwin G. Amojelar, Manila Times