HIGH interest rates caused the growth of total outstanding bonds in the region to slow in June, according to the Asian Development Bank .
“Asia’s banking sector showed resilience during the recent banking turmoil in the US and Europe; but we’ve seen vulnerabilities and defaults among both public and private borrowers since last year,” said ADB Chief Economist Albert Park. “Higher borrowing costs pose a challenge especially for borrowers with weak governance and balance sheets.”
The report also stated the corporate bond market, which accounted for 13.6 percent of the total debt stock, rebounded 1.2 percent quarter on quarter in the second quarter of 2023. “Issuances of treasury and other government bonds exceeded maturities, even as central bank securities contracted. A large volume of issuances helped corporate bonds rebound,” ADB said about the LCY bond market in the Philippines.
“Government bond yields rose for most tenors between 1 June and 31 August, influenced by a still elevated inflation and a slower-than-expected economic growth in the second quarter that dampened investor sentiment. Only the 1-month and 3-month tenors posted declines during the review period,” ADB said.