The Money

Market and
Bond Market
Money Market
Money market is a place where banks and institutions
can buy or sell short-term debt instruments, with
maturity that lasts overnight to a year. It is a means for
big companies and financial institutions like banks and
investment corporations to borrow capital quickly.
Money Market
Since such instruments are debt instruments, they are
interest-bearing. Acquiring them would let the investor
to earn interest, which is paid at a periodic interval.
That’s why they’re also collectively considered as fixed
income securities. Not only that, they can be traded
and they usually mature within a year.
Money Market Fund
These debt instruments are bought and sold (traded) in
wholesale. It’s not really practical for any average Filipino
investors to get hold of these securities.
Thus, money market funds are created to be sold in retail
to the investing public. This means that instead of having
to personally buy and own these securities, fund manager
of the money market fund to do it on the investor’s behalf.
List of Philippine money market
funds:
Mutual fund companies
Unit investment trust funds
Personal Equity and Retirement Account (PERA)
Variable universal life (VUL) plans
Sample Money
Market Funds
in the
Philippines
Money markets less risky
Again, it is crucial to always have a thought that risks cannot
be eliminated entirely, but it is also valid to consider that not
all risks are created equal.

Money market tends to be regarded as the least risky

compared to bonds and stocks. This is because of the short
maturity. Risk is reduced because there is a shorter length of
time that these debts are expected to be paid.
The Philippine
Bond Market
Philippine Bond Market
The Philippine domestic bond market consists of short-
and long-term bonds, mainly issued by the national
government. The Philippine bond market is dominated
mainly by Treasury notes and bonds. Although the size
of the Philippine corporate bond market is still small
relative to government bonds, it has been growing
rapidly over the years.
Types of Securities by Issuer
Category
A. Issued by the National Government through the Bureau of Treasury
(BTr)

i. Treasury bills (fixed-rate)

ii. Treasury bonds (fixed-rate coupon-bearing and zeroes)

iii. Retail treasury bonds (RTBs, fixed-rate coupon-bearing)

iv. Multi-currency retail treasury bonds (MRTBs, fixed-rate coupon-bearing)

v. Dollar-linked peso notes (fixed-rate)

Types of Securities by Issuer
Category
B. Issued by the National Government through Other Entities

i. Debt securities issued by government-owned and -controlled corporations

(GOCCs)

ii. Debt securities issued by government agencies

Types of Securities by Issuer
Category
C. Issued by Private Entities

i. Straight bonds (corporate notes and bonds)

ii. Zero-coupon notes and bonds

iii. Floating-rate corporate notes

iv. Bank-unsecured subordinated debt capital securities

v. Certificates of deposit
Types of Securities by Issuer
Category
C. Issued by Private Entities

vi. Commercial paper (CP), which is an evidence of indebtedness of any person

with a maturity of less than 365 days.

vii. Long-term commercial paper (LTCP), which is an evidence of indebtedness of

any person with a maturity of more than 365 days. The term shall include, but not
limited to, bonds and notes.

viii. Acceptances (trade acceptances and bankers acceptances)

ix. Securitized bonds

2019 Top Corporate Borrowers
At the end of 2019, only 56 companies were actively tapping the bond
market. The top 10 corporate bond issuers during the period were Metrobank,
Ayala Land, SM Prime Holdings, BDO Unibank, SMC Global Power, San Miguel,
Philippine National Bank, Security Bank, SM Investments and Petron.

Banks and investment houses remained the largest investor group in the
government bond market in the third quarter while contractual savings
institutions were the second-largest holders of government bonds.
Best money
market and
funds in the
Philippines
Money market fund and
bond performance for the
year 2019
Sources:
http://www.waseda.jp/win-cls/CA_BMGS/ABMF%20Vol1%20Part%202%20Sec%208
%20PHI.pdf

file:///E:/Downloads/20080410_bond_market.htm

https://www.philstar.com/business/2019/11/21/1970437/philippines-bond-market-
contracts-q3

https://pesolab.com/how-to-invest-in-bond-funds-in-the-philippines/#Top_bond_fu
nds_in_the_Philippines

https://www.treasury.gov.ph/wp-content/uploads/2020/03/Financial-Market-Update
-03-10-2020.pdf