Phl bond market hits P3.2T in 2010, says ADB

MANILA, Philippines -  The local currency bond market amounted to P3.2 trillion (approximately $72.8 billion) last year, of which more than two-thirds were government borrowings.

The amount, however, is a measly sum in relation to the $5.2-trillion total raised in the emerging East Asia market over the same period, according to the Asian Development Bank (ADB) in its quarterly Asian Bond Monitor report.

Emerging East Asia comprises the People’s Republic of China (PRC); Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; Singapore; Thailand; Vietnam; and the Philippines.

According to the report, total Philippine government bonds issued grew 10 percent to P2.8 trillion (roughly $64.3 billion) last year, driven by a surge in Treasury bonds of 17.5 percent in fourth quarter of 2010.

“The (Philippine) government lengthened its debt maturity profile with a debt exchange program,” the ADB said.

Corporate or private sector bonds grew just 4.8 percent while Treasury bills declined 15.2 percent to P527 billion ($12 billion).

In the fourth quarter of 2010 alone, the public sector borrowed P304 billion in debt issuance, another P223 billion in Treasury bonds, and P81.3 billion in Treasury bills. In the same period, the private sector was practically inactive in the local currency bond issues.

However, the corporate sector issued dollar-denominated bonds worth $700 million in the same period. Banco de Oro Unibank Inc. (BDO) accounted for $300 million and SM Investments Corp. the remaining $400 million worth of foreign currency denominated bonds.

Just last January, SMC Global Power Holdings Corp. issued a $300-million, five-year dollar-denominated bond, while Energy Development Corp. (EDC) raised the same amount.

The Philippine government sold $1.25-billion (P54.77 billion) in 25-year peso global bonds. “The bonds were peso-denominated but will be settled offshore and payable in dollars,” the ADB report said.