Five publicly listed firms returned to the local debt market in the first two months of 2022 to list a total of P112.5 billion in local currency denominated bonds, of which three-fifths or P67.5 billion were issuances aimed at raising funds for sustainable investments and climate action-related projects.
Philippine Dealing and Exchange Corp. (PDEx) president-CEO Antonino Nakpil said in his recent report to the Capital Market Development Council (CMDC) that BDO Unibank Inc. and Rizal Commercial Banking Corp. (RCBC) were the two issuers of these Green, Social and Sustainability Bonds (GSSBs), through their listings of P52.7 billion and P14.76 billion, respectively, of ASEAN Sustainability Bonds both due in 2024.
BDO’s ASEAN Sustainability Bond issuance was 10 times its original offer of P5 billion—and is also the largest private bond issuance ever by any Philippine financial institution or company.
RCBC’s listing, which is its fifth GSSB offering, was oversubscribed by nearly 5 times from the planned P3 billion issue size.
The rest of the first five issuers were SM Investments Corp., which listed P15 billion-worth of fixed-rate bonds due in 2025 and 2027; Bank of the Philippine Islands (BPI), with P27 billion in fixed-rate bonds due in 2024; and Century Properties Group Inc. (CPGI), with P3 billion in fixed-rate bonds due in 2027.
Nakpil said at a CMDC meeting that two of the listings—those of BPI and CPGI—were done through the electronic Securities Issue Portal (e-SIP), which allows the online registration and processing of documents in the primary market and the selling of securities online.
Since its launch in May last year, the e-SIP was already used in 13 listings by 12 companies, which include pioneer issuer Ayala Land Corp. (ALI), Nakpil said during the meeting.
The other e-SIP users were Ayala Corporation, Aboitiz Equity Ventures Inc., PHINMA Corp., D&L Industries, Petron Corp., Aboitiz Power, Filinvest Land Inc. (FLI), AREIT Inc., SL Agritech Corp., Bank of the Philippine Islands (BPI), and Century Properties, he added.
Co-chaired by Finance Secretary Carlos Dominguez III, lawyer Benedicta Du-Baladad of the Financial Executives Institute of the Philippines (FINEX) and Securities and Exchange Commission (SEC) chairman Emilio Aquino, the CMDC is the coordinating body tasked to facilitate the development of the Philippine capital markets.
To further democratize bond investing, the capital market is expected to reach several milestones in the homestretch of the Duterte administration.
SEC Commissioner Ephyro Luis Amatong said that among these milestones is the initial public offering of securities by smaller companies outside of the stock exchange to enable them to offer shares to the public and/or raise funds for their expansion projects.
One of them, the Tagum Global Medical Center Inc., already secured the approval of its registration statement and has been issued a pre-effective letter by the SEC.
“This provides a model for other similar smaller entities such as possibly those broadcast companies, the regional radio stations which are required to offer their shares to the public, but without necessarily listing in the Philippine Stock Exchange (PSE),” Amatong said during the CMDC meeting.
Another milestone is the expected release in the second quarter of the SEC’s rules on “umbrella funds” for the mutual fund industry, Amatong said.
Amatong said the rules on umbrella funds would allow corporations to set up multiple sub-funds under one investment company, instead of the current setup of allowing only one fund per investment company.
Adding another fund under current rules would require incorporating a new company, he said.
“Under our proposed umbrella fund rules, a fund can set up multiple sub-funds underneath its umbrella. So, the idea here is to reduce the cost, to reduce the time spent complying with requirements with the SEC,” Amatong said.
Amatong said that on Feb. 18 the SEC already published the proposed umbrella fund rules for comments by the industry and the public, and was expected to review them by March 5 so that the rules can be issued within the second quarter of this year.