MANILA, Sept. 18 (Xinhua) -- Emerging East Asia's local currency bond market expanded steadily in the second quarter of 2019, according to the latest issue of the Asian Development Bank's (ADB) Asia Bond Monitor released on Wednesday.

The report said that local currency bonds outstanding in emerging East Asia totaled 15.3 trillion U.S. dollars at the end of June 2019, up 3.5 percent in U.S. dollar terms from the end of March this year and 14.2 percent higher than the end of June 2018.

Moreover, the report said that bond issuance in emerging East Asia totaled 1.6 trillion U.S. dollars in the second quarter, 12.2 percent higher than in the first quarter due to strong issuance of government bonds and a recovery in corporate bonds issuance.

ADB report said that foreign investment in emerging East Asia's bond markets remained stable in the second quarter.

"Foreign investment in emerging East Asia remains stable but there are still considerable potential risks," said ADB Chief Economist Yasuyuki Sawada.

"Governments in the region would do well to continue to deepen local currency bond markets so they can act as a reliable local source of funding," Sawada said.

ADB said emerging East Asia comprises China, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

It added that foreign holdings of local currency bonds rose in China on expectations of additional economic stimulus from the government, and in Indonesia on the back of a credit ratings upgrade.

According to the report, China remained emerging East Asia's largest bond market, accounting for 75.3 percent of the region's total outstanding paper.

"In China, the stock of local government bonds expanded 5.4 percent on a quarter-on-quarter basis, the fastest of any bond category in China, following directives for local governments to accelerate the issuance and use of special bonds to support economic growth and finance infrastructure and other development projects," the report said.

At the end of June, China's debt-to-gross domestic product ratio was 84.6 percent versus 78.8 percent at the end of June 2018," the report added.

Established in 1966, ADB is owned by 68 members and 49 members are from the Asia-Pacific region.