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Manila Bulletin devider Business devider Banking & Finance devider Despite front-loaded government borrowings, Philippine bond issuances cool amid US tariff uncertainty

Despite front-loaded government borrowings, Philippine bond issuances cool amid US tariff uncertainty

Published Sep 16, 2025 12:20 pm
A wait-and-see stance among private-sector borrowers and the central bank amid uncertainties wrought by United States (US) tariffs and their global trade spillover offset robust national government borrowings and slowed the issuance of Philippine peso-denominated bonds in the second quarter, the Asian Development Bank (ADB) said.
In its Asia Bond Monitor report for September 2025, published on Monday, Sept. 15, the Manila-based multilateral lender said the local currency (LCY) bond market in the Philippines grew by 2.7 percent quarter-on-quarter to ₱13.8 trillion at end-June, a more sluggish pace than the 4.1-percent quarter-on-quarter growth in the preceding quarter.
“The moderated growth was driven by contractions in the stock of central bank securities (-18.9 percent quarter-on-quarter) and corporate bonds (-4 percent quarter-on-quarter) due to reduced issuances during the quarter,” the report explained.
It was despite front-loading of sovereign borrowings by the Bureau of the Treasury (BTr), which pushed outstanding treasury bonds (T-bonds) and other government securities (GS) higher by 5.2 percent quarter-on-quarter.
The ADB said the government ramped up its bond issuances in the second quarter “amid a favorable interest rate environment.”
The volume of bonds issued in the domestic market during the April to June period inched up by 0.5 percent quarter-on-quarter to ₱2.7 trillion, a slowing down attributed by the ADB to “global trade uncertainty.”
“Corporate bond issuance declined 23.5 percent quarter-on-quarter in the second quarter of 2025, as companies delayed expansion plans amid uncertainty surrounding trade,” the ADB said.
This was despite the issuance of Ayala-led Bank of the Philippine Islands’ (BPI) supporting inclusion, nature, and growth (SINAG) bonds, which raised ₱40 billion and accounted for nearly three-fourths of total corporate bonds issued during the period.
“Issuance of central bank securities also declined (-13.2 percent quarter-on-quarter) during the quarter as the BSP [Bangko Sentral ng Pilipinas] aimed to support financial market activity,” the ADB added.
On the other hand, the ADB noted that BTr bond sales jumped 32 percent quarter-on-quarter in the second quarter, supported by the issuance of ₱300 billion in 10-year benchmark bonds last April.
The ADB said that during the period June 2 to Aug. 29 of this year, the LCY sovereign bond yield curve in the country dropped across the board.
“Yields across the curve fell an average of 17 basis points (bps) on a dovish monetary policy stance by the BSP amid easing inflation and a slowing economy,” the report said.
The BSP cut key interest rates by 25 bps each last June 19 and Aug. 28, bringing the key policy rate to five percent at present.
At end-August, headline inflation averaged 1.7 percent, below the two- to four-percent target band of annual price hikes deemed manageable and conducive to economic growth.
First-half gross domestic product (GDP) expansion averaged 5.5 percent year-on-year, at the lower end of the government’s downscaled 5.5- to 6.5-percent goal for 2025, as the Marcos Jr. administration’s economic team braced for “heightened growth risks stemming from external policy uncertainty and Middle East tensions” during its midterm review, the ADB noted.
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