The Philippine bond market logged the fastest quarter-on-quarter growth in emerging East Asia in the first three months of the year on increased government borrowings to fund its deficit and pandemic response, the Asian Development Bank (ADB) said on Friday.

The June issue of the ADB’s Asia Bond Monitor showed the country’s bond market recorded the fastest expansion in the subregion, which is composed of the Philippines, China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Thailand and Vietnam.

Outstanding bonds grew by 6.5% to $188 billion in the first quarter from $178 billion in the fourth quarter of 2020. This was the fastest rate in the region, which was followed by Indonesia’s 6.2%.

“Quarterly growth accelerated from 5.3% quarter on quarter in the fourth quarter of 2020, driven entirely by the government segment as the corporate segment saw contraction during the quarter,” the ADB said.

Meanwhile, the local bond market expanded by 28.4% from the $140 billion recorded in the first quarter of 2020. This was the second-fastest print in the region after Indonesia’s 36%.

Broken down, government bonds made up 82.7% of the total issuances in the first three months of 2021 while corporate bonds accounted for the remaining 17.3%.

ADB data showed outstanding government bonds reached $155 billion as of March, growing by 8.4% from the $145 billion seen in the last three months of 2020. It also climbed by 36.5% from the $109 billion a year earlier. Meanwhile, outstanding corporate issuances were at $33 billion in the first quarter, slipping by 2% from the $34 billion logged in the previous three-month period.