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Discussions around the marketplace, including at the influential Management Association of the Philippines (MAP), centered on the historic Tuesday and its effect on the political arena, which eventually influences the environment of doing business.
Sandwiched between former president and chief executive officer (CEO) of the state-run Development Bank of the Philippines (DBP), Francisco “Popoy” del Rosario Jr., and architect Felino “Jun” Palafox Jr., it’s interesting to hear the thoughts of these industry stalwarts.
Internationally recognized urban planner Mr. Palafox agreed with the observation of former Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo that the Tuesday event could be disruptive to the country's growth potential.
The political noise arising from the developments on Tuesday, including the impeachment complaint against the Vice President and questions about the 2025 budget, is a risk and, simply put, sealed the “disunity” of the Uniteam, noted the retired Deputy Governor for monetary stability.
In a text message, Mr. Palafox shared that foreign investors he met shortly after are closely monitoring the “current events, which is bad for investments.” Instead of coming in, these foreign investors “might wait till after 2028,” when there’s a change of the country’s leadership.
At the local bourse, the domestic political noise, coupled with the trade policies of a potential Trump 2.0 administration, caused stock prices to slip, with the Philippine Stock Exchange index dipping by 0.18 percent to 6,195.26 points.
Amid all these, however, market players remain positive that the timing is right for Aboitiz Power Corp. (AP) to float some ₱100 billion in retail bonds, which will be issued in tranches.
“It’s a good time for investors with money to park to buy fixed-income bonds,” commented a market player. This is against the backdrop that the local bourse is currently on a rollercoaster ride, influenced by a relatively volatile political and economic environment.
Accordingly, retail bonds with a fixed yield are better options. The caution is: retail bond investors must hold the bonds to maturity to maximize their investments.
Based on the issuance timetable, the first tranche of AP retail bonds is scheduled within the second quarter of the year. The amount has yet to be pegged for the first float, but the proceeds have already been earmarked to “refinance” AP’s outstanding obligations.
Included in the timetable is to list the retail bonds on the Philippine Dealing & Exchange Corp. (PDEx) in the third quarter.
It has been heard within the walls of the banking corridor that BPI Capital is one of the underwriters helping to draw up the fine print of the issuance—issue amount in tranches, interest rate, offer price, tenors, and other terms of the bonds.
Depending on investor appetite, AP has been given the flexibility to increase its float, like a greenshoe option in an initial public offering (IPO), by ₱20 billion.
Union Bank of the Philippines (UBP) cannot and should not be one of the underwriters because it’s incestuous. Simply put, it’s improper to have a sister company handle the offering. UBP and AP are owned and controlled by the Aboitiz family.
I just got this: BDO is the issue manager.
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