PH bond market rises in first quarter –

The Philippine local currency (LCY) bond market recorded a rise in the first quarter of this year, driven by the expansion of government bonds, according to a report released by the Asian Development Bank (ADB).

Manila-based lenders said in their latest “Asia Bond Monitor” that issued LCY bonds rose 6.5% and 28.4% quarterly and a year ago, respectively, to reach 9.1 trillion pesos.

Government bonds during the period reached 6.95 trillion pesos, up 35.3% and 7% from a quarter ago and a year ago, respectively.

“Mainly government bonds and government bonds drove the increase as the government continued to borrow heavily from the local market to help the Covid-19 (coronavirus disease 2019) and help the economic recovery,” the report said. It was.

However, unpaid corporate bonds amounting to P1.5 trillion decreased by 2% quarterly. This is due to the maturity of bonds that ADB offset new issuance during the quarter.

In another statement, ADB said East Asia’s emerging local currency bond market reached $ 20.3 trillion, surpassing $ 20.0 trillion in the fourth quarter, $ 16.2 trillion recorded a year ago. ..

ADB said bond market growth during the period was 3.1 in the previous quarter as local governments tried to balance fiscal policy and the private sector remained cautious amid new outbreaks and heterogeneous vaccine deployments. He said it had fallen from% to 2.2%.

Emerging East Asia consists of China, Hong Kong, Indonesia, South Korea, Malaysia, Philippines, Singapore, Thailand and Vietnam.

“The persistent uncertainties surrounding Covid-19’s pandemic and looming inflationary pressures have hit emerging East Asian fixed income markets, leading to volatility and mixed performance in regional financial and equity markets.” Yasuyuki Sawada, ADB Chief Economist, said.

“The region’s rapidly expanding and sustainable bond market, supported by a green, comprehensive recovery and growing interest in facilitating public policy, is the region’s commitment to smarter post-pandemic reconstruction. It will be the key, “he added.

According to ADB, pandemics remain the biggest risk to the bond market in the region.

It was noted that in some markets, new outbreaks, the emergence of new viral variants, and slower vaccine deployments could impede economic activity. Concerns that the Federal Reserve Board of Governance could tighten monetary policy in response to rising inflationary pressures could put pressure on the region’s financial position.