Treasury bills and bonds led the Philippine local currency (LCY) bond market to grow at a “robust” year-on-year rate (y-o-y) of 12.5 percent as of the third quarter of the year, according to the quarterly Asia Bond Monitor from the Asian Development Bank (ADB).
Total LCY bonds amounted to P4.3 trillion ($98 billion) at end-September, increasing 3.6 percent from P4.1 trillion at end-June.
The report said that government securities accounted for the majority of bonds outstanding, totaling P3.7 trillion, while corporate bonds reached P544.2 billion.
Outstanding fixed-income instruments issued by the Philippine government and government-controlled companies went up by 13.6 percent year-on-year and 4 percent quarter-on-quarter to close at P3.7 trillion at end-August.
The ADB report added that treasury bills advanced at 18.1 percent year-on-year and 0.3 percent quarter-on-quarter. It stood at P309.3 billion at end-August. Treasury bonds rose 14.1 percent year-on-year and 4.6 percent quarter-on-quarter to P3.3 trillion.
In terms of issuance in the third quarter, the report said that P210-billion worth of treasury bonds were sold compared with P130 billion of treasury bills.
“The Bureau of the Treasury sold P100-billion worth of 10-year Retail Treasury Bonds in August,” the publication said.
Meanwhile, total outstanding LCY corporate bonds grew 0.6 percent quarter-on-quarter and 5.8 percent year-on-year to reach P544.2 billion as of end-September.
“Ayala Land Inc. and Globe Telecom issued corporate bonds in amounts of P15 billion and P7 billion, respectively. Banco de Oro Unibank and Philippine National Bank were the next largest issuers in third quarter 2013, raising P5-billion worth of Tier 2 notes each,” the ADB report said.
On the other hand, the report said that only 50 companies are actively tapping the capital market in the country.
It said that the top 30 issuers accounted for 80.9 percent of the total amount of LCY corporate bonds outstanding (P544.2 billion) at end-September.
“San Miguel Brewery [SMB] remained the largest corporate issuer in the country with P45.2 billion of outstanding debt. Ayala Land Inc. followed SMB as the next largest borrower with P43.9 billion outstanding. Ayala Corp. was in the third spot with P40 billion of outstanding bonds,” it stated.
The report further said that as the Bangko Sentral ng Pilipinas “moved toward more stringent liquidity and capital requirements,” banks and financial services, including investment houses, remained the leading issuers of debt in the third quarter with 27.2 percent of the total.
It added that the market share of most industries remained unchanged, except for real estate, which increased to 17.9 percent, noting also that firms from industries as diverse as electricity generation and distribution, telecommunications, and thoroughfares and tollways continued to have shares of total corporate bonds outstanding in the single-digit levels.