Phl firms seen tapping US market in 2025

The Philippines is likely to tap the US credit market anew next year as it sees possible opportunities to diversify its sources of funding, according to US investment bank J.P Morgan.

- MARIANNE GO

The Philippines is likely to tap the US credit market anew next year as it sees possible opportunities to diversify its sources of funding, according to US investment bank J.P. Morgan.

In a recent briefing on its 2025 outlook for the Asia credit market (excluding Japan), Puja Shah, J.P. Morgan's head of Southeast Asia DCM & Sustainable Finance Asia ex. Japan, noted that "It has been a busy year from the Philippines space, especially for Philippines bank issuers coming to market. We expect that the Philippine banks will be more opportunistic next year."

Likewise, she said, "We do expect the sovereigns to continue to be active in the market as they were this year, and we expect more corporate supply. We've had some very successful transactions this year with some companies, such as SM Group. So I do expect some of the corporate issuers to come back to market next year."

Shah observed that "a lot of the corporate issuers will look at the US dollar market more as a diversified source of funding. The dollar-local currency differential is becoming lower for some of the Southeast Asian countries and therefore, (it is) more justifiable for them to look at the dollar market."

She acknowledged, "In general, deals have done very well in the Philippines, and investors have been welcoming of Philippines corporate borrowers."

Likewise, she said, "Onshore support for Philippines borrowers tend to be very strong. We expect that for next year, this will remain a key attraction for offshore investors who buy into these papers. From an investor's perspective, Philippines issuers should do relatively well."

In its briefing, J.P Morgan reported that Asia issuers have so far raised $157 billion, surpassing the full year amount of $107 billion raised in 2023.