what is the potential growth or recent development in the philippine financial system

what is the potential growth or recent development in the

Philippine Financial System/Markets

Bond Market (Local Currency Bond Market)

-Local currency (LCY) bonds issued by both the public and private sectors amounted to P817.9

billion in the first quarter of 2020. This was more than the P346.4 billion registered in the

previous quarter and 24.5 percent higher than the P657.2 billion recorded in the same period

last year. Moreover, LCY(Local currency) bond issuances of the public sector increase. The

National Government (NG) -issued Treasury bills (T-bills), fixed-rate Treasury bonds (T-bonds)

and retail Treasury bonds (RTBs) reached a total of P670.0 billion, an increase by 212.1 percent

from the comparable Q4 2019 level. The increase in government issuances

reflected the need for the NG to (1) finance expenditures authorized in its annual appropriation

and (2) help counter the impact of the COVID-19

outbreak in the country. Similarly, the private sector issuance of LCY bonds

amounted to P147.9 billion, 12.3 percent higher than that in the previous quarter and 154.0

percent higher than the amount in the previous year. Local firms tapped the bond market as

they took advantage of the relatively low interest rate

environment due to the policy rate cuts and enhanced liquidity measures implemented by the

BSP.

Primary Market

-In the primary auctions conducted for both T-bills and T-bonds, the NG offered a total of P562.2

billion short- and long-term debt securities. Demand was robust as total tenders were

oversubscribed by about 1.8 times. The market showed preference for short-term dated debt

securities as tenders for T-bills reached P599.8 billion as against the NG’s offering of P278.2

billion. Such tenders were higher than the tenders for T-bonds, which reached P438.3 billion

against the P284.0 billion offering. Relatively higher demand for short-term debt indicates

investors’ risk-averse attitude amid the uncertain and challenging market environment.

Secondary Market

- Trading of both government and private corporate bonds in the secondary market increased by

84.4 percent to P1,757.5 billion in the review quarter from P953.0 billion in the previous quarter.

Similarly, on a y-o-y basis, trading in the secondary

market also increased by 45.8 percent.

Foreign Currency Bond Market

- During the quarter, the government issued in the offshore market €$1.2 billion worth of new 3-

year and 9-year global bonds to support its budgetary needs. The National Government took

advantage of the strong demand and relatively lower rates from European investors.

-As we recognize uncertainties, we are also fully aware of the potential impact of climate and

environment-related risks to the local and global economy. The BSP, have incorporated climate

and disaster-related data in monetary policy analysis forecasting, monitoring, and risk

assessment. Moreover, the BSP issued various regulations on corporate and risk governance,

including stress testing as well as regulatory reliefs provided to banks affected by natural

calamities. At the same time, the BSP, together with the Department of Finance, co-chairs a

newly formed inter-agency task force that is mandated to facilitate green finance initiatives.

-With regard to financial learning, BSP's partnerships with the Department of Education, the

Overseas Workers Welfare Administration, the Armed Forces of the Philippines, and the Civil