Market Summary

Size and Composition

In the fourth quarter (Q4) of 2022, the local currency bond market of the Philippines grew a marginal 0.2% quarter-on-quarter (q-o-q) to reach a size of PHP11,196.5 billion (USD200.9 billion). Outstanding government bonds declined, driven by maturities exceeding the issuance of Treasury bills and other government securities. The outstanding stock of corporate bonds grew 4.4% q-o-q amid increased issuance volume during the quarter.

Notable Corporate Bond Issuance

Higher borrowing costs capped corporate bond issuance as growth decelerated 1.6% q-o-q to PHP127.5 billion in Q4 2022 from PHP125.5 billion in the previous quarter. San Miguel was the top issuer during the period, representing 47.0% of the total corporate bond issuances in Q4 2022.

Policy and Regulatory Developments

On 16 December, the Philippine president signed into law the 2023 General Appropriations Act authorizing a national budget of PHP5.27 trillion. To support financing of the state budget, the government plans to borrow PHP2.21 trillion in 2023. The planned borrowing will comprise 75% (PHP1.65 trillion) domestic debt and 25% (PHP553.50 billion) foreign borrowing. Domestic borrowing will be made through auctions of Treasury bills, notes, and bonds to the public, while foreign borrowing will be acquired through loans from foreign financial institutions or by floating government securities in the international market.