THE Philippines’ local currency (LCY) bond market eased slightly quarter-on-quarter (q-o-q) amid the drop in government bonds, according to a new report from the Asian Development Bank (ADB).
“LCY bonds outstanding in the Philippine market marginally declined 0.1 percent quarter-on-quarter to P6.69 trillion ($129.2 billion) at the end of September from P6.71 trillion at the end of June,” the Manila-based lender said in its latest ”Asia Bond Monitor” report.
However, it grew 15.7 percent from P5.79 trillion or $107 billion a year earlier.
Government bonds outstanding totaled P5.25 trillion, declining 0.7 percent quarter-on-quarter “largely driven by the 15.3 percent q-o-q decline in the stock of Treasury bills,” the publication said.
Meanwhile, Treasury bonds rose marginally by 1.3 percent from the second quarter, while bonds issued by government-related entities fell 0.03 percent quarter-on-quarter.
“Total issuance of government bonds fell to P273.4 billion in Q3 (third quarter) [of] 2019 from P312.4 billion in the previous quarter, primarily due to the lower planned auction schedule for the quarter by the Bureau of the Treasury (BTr),” the ADB report noted.
Quoting BTr, it said that the smaller borrowing program resulted from government underspending in the first half of 2019, given the delay in the passage of the 2019 budget.
“The government also had enough of a cash buffer from the large issuances conducted in the first half of 2019,” the paper added.
Outstanding corporate bonds, on the other hand, grew 2.1 percent to P1.4 trillion from the three months to June period, and 20.7 percent from a year ago despite the lower issuance volume during the third quarter.
Banks, with P548.9-billion aggregate bonds, continued to make up the largest share of the Philippine corporate bond market with a 37.9-percent share, up from the 28.6 percent share at the end of the third quarter of 2018.
Property firms remained the second largest sector in the corporate bond market with P356.1 billion of bonds outstanding, but their share declined to 24.6 percent from 28.4 percent a year earlier.
The shares of holding firms also fell to 15.9 percent at the end of September from 21.5 percent in September 2018, while the shares of utility companies rose to 15.5 percent from 11.7 percent in the same period.