Corporate bond issues soared by 45% in Jan., Feb.

Corporate bond issuances jumped by 45 percent in the first two months of 2012, indicating a potential rise in investments by domestic enterprises this year, according to monetary officials.

Bonds sold by corporate entities in January and February reached P65.2 billion, up from P45.1 billion a year ago, data from the Bangko Sentral ng Pilipinas showed.

BSP officials said the rise in bond sale was a development as it showed diversification of funding sources by enterprises, which used to depend on banks for their financing requirements.

But officials said bank loans grew as well, indicating a rising demand for funds.

Outstanding loans from universal and commercial banks amounted to P2.76 trillion as of end-February, up by 18 percent from P2.34 trillion in the same period last year, the BSP earlier reported.

Officials said proceeds from bond issuances and bank loans are expected to be used in investments and expansion programs of enterprises, which are seen boosting economic growth

The government is projecting a 5- to 6-percent growth in economy this year, faster than the 3.7 percent posted last year.

Last year’s growth rate was slower than the 7.6 percent in 2010, which was the fastest in more than three decades.

Economic officials are hoping for the reversal of the slowdown last year, saying this could be achieved if domestic demand will rise and counter the effects of the slump in exports.

They said investments by local enterprises, aided by proceeds from bank loans and corporate bond issuances, will help spur domestic demand.

In the meantime, the rise in corporate bond issuances reflected a shift in preference of enterprises from equities. Stocks sold through the PSE reached P5.2 billion in the first two months, down by 70 percent from P16.9 billion a year ago.

Economists said the drop in equity sale came amid an uncertain global economic environment that adversely affected demand for stocks.