Bond market expected to recover next year

MANILA, Philippines — After a sluggish performance this year because of heightened uncertainties, the corporate bond market is expected to recover next year, according to the Philippine Dealing and Exchange Corp.

PDEx president and CEO Antonino Nakpil told reporters on the sidelines of the bond listing of Ayala-led Bank of the Philippine Islands (BPI) that the amount of capital raised through corporate bond issuance is likely to fall below P200 billion this year after hitting an all-time high of P508 billion last year.

“We’re a little more circumspect this year given the situation,” Nakpil said.

He said issuers thought that the volatile, uncertain, complex and ambiguous situation would not last long.

“We will be lucky to reach P200 billion in issuances this year,” he said.

BPI’s issuance of P36.6 billion in fixed-rate bonds brought to 12 the number of bond issuances this year, with total capital raised hitting P172.5 billion.

Issuers in the pipeline include Vista Land & Lifescapes Inc. of billionaire Manny Villar as well as Aboitiz-led Union Bank of the Philippines.

For 2024, PDEx estimates that the amount of capital to be raised via the issuance of corporate bonds could double to P400 billion after slumping this year.

“We expect more people to come back because by that time, people would be more used to where the levels of interest rates are,” Nakpil added.

According to Nakpil, more corporate bonds are scheduled to mature next year and could prompt issuers to return to the domestic bond market to refinance loans or raise capital for expansion.

Aside from the big companies, he said that PDEx is also trying to reach smaller issuers, particularly micro, small and medium enterprises (MSMEs).

For next year, Nakpil said issuers would likely come from the banking sector, property and holding companies, among others.

The P36.6 billion fixed rate bonds is the biggest so far this year, beating the P33.3 billion bonds issued by Sy-led SM Prime Holdings Inc. in May.

The Philippine Dealing System Holdings Corp. (PDS) has recently partnered with Asia’s leading Environmental, Social, and Governance (ESG) data and technology solutions company, STACS.

Under the partnership, PDS