Corporate bond issues in Q1 up 56% to P98B

Corporate bond issuances rose in the first quarter from a year ago, as more businesses raised money to fund investments and other expenditure requirements.

Data from the Bangko Sentral ng Pilipinas showed that bonds issued by corporations in the first quarter reached P98 billion, up by 56 percent from P62.8 billion in the same period last year.

“Corporate issuers continued to tap other sources of financing,” the BSP said in a report to the Monetary Board during its last policy-setting meeting.

According to the BSP, enterprises have become less reliant on bank loans for their funding needs, as liquidity in the bond market is sufficient to meet their demand.

The BSP said that while bank lending remained a significant source of financing, the bond market was able to provide an alternative source of liquidity for businesses in the country.

Funds raised from the sale of equity shares through the Philippine Stock Exchange, however, declined in the first quarter.

Analysts said global economic uncertainties fueled risk aversion among investors and boosted appetite for less risky instruments, particularly fixed-income securities like corporate bonds.

Capital raised through the Philippine Stock Exchange in the first quarter hit P10.2 billion, down by 45 percent from P18.6 billion a year ago.

In the first quarter, the economy, measured in terms of gross domestic product, grew by 6.4 percent from a year ago. This was faster than the 4.9 percent recorded in the same period last year. It was also the second-fastest growth rate in Asia for the period next to China’s 8.1 percent.

The country’s economic managers claimed that the economy’s resilience boosted optimism in the business community despite unfavorable developments offshore.

The BSP earlier reported that business confidence index in the first quarter improved to +40.5 percent from +38.7 percent in the fourth quarter of last year.

A positive index means respondents who are optimistic about the economy and profitability of their businesses outnumber those who are pessimistic about the same.