Finance Secretary Cesar V. Purisima on Tuesday invited investors at a forum in Hong Kong to invest more in the Philippines, citing the strength of the country’s economy and the growth of its capital markets the past five years.
At the Philippines Capital Markets Forum in Hong Kong, Purisima said while the size of the local currency government bond market remained the same since 2009, the investment grade ratings achieved by the Philippines from all three major credit rating agencies demonstrate the confidence of foreign investors in the government’s ability to honor its obligations.
As of the end of 2014, the country’s local currency government bond market equal 31 percent of the gross domestic output (GDO) of the capital markets industry.
He also said the local currency corporate bond market has more than doubled since 2009. From only $7.61 billion in 2009, the corporate bond market as at end-2014 was worth $17 billion, or a growth of 123 percent.
This figure translates to 6 percent of the gross domestic product (GDP).
Purisima noted that corporate bonds are also being offered at longer maturities, demonstrating the trust by investors on the ability of the Philippine private sector to honor corporate bonds issued by corporations.
From 2000 to 2010, corporate bonds with maturities greater than 10 years only made up 0.62 percent of the total corporate bonds. But as of end-2014, corporate bonds with maturities longer than 10 years constituted 8.05 percent of the total.
Purisima also cited the Philippines’ attractiveness and credit-worthiness in the eyes of foreign investors looking to invest in foreign currency denominated government bonds, as shown in the “switch” tender offer exercise conducted by the Philippines in January 2015, wherein the country offered new global bonds in exchange for outstanding bonds to extend the maturity dates of its foreign debt.
The forum in Hong Kong is organized by FinanceAsia and also discussed the opening up of the bond market, and the outlook on which sectors will see the most activity in the near-term horizon, especially among countries in the Asean.