UnionBank of the Philippines completes digital peso bond issuance

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The Philippines’ first-ever digital peso bond issuance by the UnionBank of the Philippines (UBP) has been completed successfully, local media outlet the Manila Bulletin reports. The bonds are now trading on the Phil. Dealing & Exchange Corp. (PDEx) Fixed Income Market.

The issuance is the final step of the universal bank’s process to pioneer the use of blockchain technology in issuing bonds in the country. The UnionBank’s treasurer and head of Global Markets Jose Emmanuel Hilado described the issuance as a game-changer.

“This pioneering issuance serves as a building block in UnionBank’s journey to embrace digitization and positive disruption in the industry. I am confident that this will be recognized globally as a game-changing digital initiative in the field of finance,” he said.

The public sale of the digital peso bonds ended back in June and saw the bank raise around $208 million (PHP11 billion) with “robust participation” from both retail and instant investors. The bonds have a tenor of 1.5 years and a fixed rate of 3.5%.

The initiative, which was first launched in May, uses the digital registry and digital depository of the Philippine Depository & Trust Corp. (PDTC), which is powered by the STACS blockchain. The Hong Kong and Shanghai Banking Corporation Limited (HSBC) and Standard Chartered Bank (SCB) are the joint lead arrangers and book-runners on the transaction, and UnionBank joins the two as selling agents for the offering.

UnionBank’s history with digital assets adoption

The Philippines has seen a boom in digital currency adoption with UnionBank at the helm of pioneering new use cases. Earlier this year, the bank disclosed plans to launch digital assets trading services for its clients.

At the time, Bloomberg reported that the move was due to increasing demand for such services the bank observed. UBP has also been driven to educate regulators and investors on the risks and opportunities that digital assets hold to promote responsible investing.

Meanwhile, the government of the Philippines has been sending mixed signals on its stance on DLT technology. On the one hand, the government is exploring use cases for blockchain technology, including handling logistics and creating financial market solutions. In contrast, government agencies like the Securities and Exchange Commission (SEC) and central bank have repeatedly cautioned about digital assets investments.

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