Philippine bond market hits $217 billion in Q4

MANILA, Philippines — The Philippine bond market went up slightly in the fourth quarter of 2023 due to the increase in government bond issuances, according to a report from the Asian Development Bank (ADB).

The multilateral lender’s Asia Bond Monitor March 2024 report showed the Philippines’ local currency bond market grew by one percent in the fourth quarter of 2023 to $217 billion from a year ago, with the growth driven by government bonds.

Treasury and other government bonds outstanding, which accounted for 82 percent of the total local currency debt stock in the fourth quarter of 2023 rose by 2.1 percent from the previous quarter.

“Despite a contraction in issuance, government bonds grew due to a low volume of maturities during the quarter,” ADB said.

It said central bank securities contracted by 6.2 percent in the fourth quarter due to a large volume of maturities during the period that exceeded total issuance. 

The corporate bond stock, meanwhile, contracted  by 2.6 percent in the fourth quarter, driven by the large number of bond maturities during that period. 

Corporate bonds accounted for 12.6 percent of the country’s local currency debt stock in the fourth quarter. 

Of the corporate bonds, the property sector accounted for the largest share with 31.6 percent.

By investor group, the Philippine government bond market remains consistently dominated by banks and investment houses and contractual savings institutions and tax-exempt institutions, with their combined bond holdings equivalent to 78 percent of the total in the fourth quarter.

Banks and investment houses remained the single-largest investor group through its 46.2 percent share of total local currency bonds in the fourth quarter.

In emerging Asia, which covers members of the Association of Southeast Asian Nations, China, Hong Kong and South Korea, the ADB said the local currency market at the end of the fourth quarter of 2023 reached $25.2 trillion, up 2.5 percent from the previous quarter.

Government bonds accounted for the bulk or 61.2 percent of the total local currency bonds outstanding in emerging Asia in the fourth quarter of last year.