More companies to tap domestic bond market

MANILA, Philippines — More companies are looking to tap the domestic corporate bond market for their funding requirements in the coming months, while banks are seen potentially returning with their huge issuances later this year.

The Philippine Dealing & Exchange Corp. (PDEx) last Monday saw its eighth listing for the year through SM Prime Holdings Inc.’s P25-billion fixed rate retail bonds.

This brought the year-to-date corporate bond issuances to P125.14 billion, already reaching more than half of last year’s total.

“We are now at listing number eight for the year and about to start a round of large funding projects for the private sector after this P25 billion issuance,” PDEx president and CEO Antonino Nakpil said.

“It appears that more CFOs (chief financial officers) are comfortable about the levels of interest rates as more of the non-bank issuers have indicated intentions to come to market,” he said.

Nakpil, however, said PDEx is hoping to see banks make their way back later this year.

“We look forward to seeing the banks return as well with jumbo issues in the latter part of the third quarter and into the fourth quarter, possibly with longer term tenor issuances,” Nakpil said.

“In any case, we are happy to see our regular corporate issuers come out with these bond issues,” he said.

The capital raised through corporate bond issuance this year is previously targeted to nearly double to P400 billion from P209.33 billion in 2023.

Amid heightened uncertainties, domestic corporate bond market issuances plunged by 58.8 percent to P209.33 billion last year from a record high of P508.66 billion in 2022.

The expectation is for a more robust domestic corporate bond market this 2024 compared to last year.

In an interview last month, however, Nakpil told The STAR that while domestic bond listings this year will exceed last year’s amount, there is a possibility that it might not reach the P400 billion target set for 2024.

“We may have to recalibrate, but we will do so by July,” he said.