Domestic bond issuances drop 59 percent

MANILA, Philippines — Funding raised via the domestic corporate bond market plunged by 58.8 percent to P209.33 billion this year from a record high of P508.66 billion last year amid heightened uncertainties, according to the Philippine Dealing and Exchange Corp. (PDEx).

The number of issuers was almost cut by half to 16 in 2023 from 30 in 2022 amid the volatile, uncertain, complex and ambiguous situation brought about by the aggressive rate hikes delivered by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The biggest issuer this year was Ayala-led Bank of the Philippine Islands (BPI), which listed P36.6 billion worth of 1.5-year fixed rate bonds on Nov. 13. The bank also raised P20.3 billion through the issuance or Reinforcing Inclusive Support for MSMEs (micro, small and medium enterprises) or RISE bonds on Jan. 30.

Sy-led SM Prime Holdings Inc. was the second biggest issuer with the listing of P33.3 billion worth of 2.5-, four- and six-year bonds on May 23.

Other issuers include Security Bank with P18.5 billion, Aboitiz-led Union Bank of the Philippines with P18.17 billion, Aboitiz Equity Ventures with P17.45 billion, property giant Ayala Land with P15 billion, Gokongwei-owned Robinsons Land with P15 billion, Gotianun-owned Filinvest Land with P11.43 billion, Villar’s Vista Land with P6 billion, Citicore Energy REIT with P4.5 billion, state-run Development Bank of the Philippines with P3.87 billion, DoubleDragon with P3.61 billion, Century Properties Group with P3 billion, as well as Alsons Consolidated Resources Inc. with P1.38 billion in June and P1.15 billion in December 

The Philippine Dealing & Exchange Corp. (PDEx) expects a strong recovery in the corporate bond market in 2024 after a sluggish performance this year.

PDEx president and CEO Antonino Nakpil said he estimates that the amount of capital to be raised via the issuance of corporate bonds could almost double to P400 billion after slumping this year.

“We expect more people to come back because by that time people would be more used to where the levels of interest rates are,” Nakpil said.

He said more corporate bonds are scheduled to mature next year and could prompt issuers to return to the domestic bond market to refinance loans or raise capital for expansion.

Aside from the big companies, he added that PDEx is also trying to reach smaller issuers, particularly micro, small and medium enterprises (MSMEs).

For 2024, Nakpil said issuers would likely come from the banking sector, property and holding companies.