Philippines needs to boost liquidity to join JPMorgan bond index

The Philippines should focus on boosting the liquidity and increasing the size of benchmark bonds to ensure the inclusion in JPMorgan Chase & Co.’s Government Bond Index-Emerging Markets (GBI-EM) by 2026, analysts said.

At the same time, National Treasurer Sharon P. Almanza said she is hopeful that the Philippines will be officially included in the bond index after the six- to nine-month assessment period.

“We will continue to deepen the secondary market liquidity through consolidation of our issuances and continue building benchmarks. We’ve also introduced the Primary Dealer System and this will help both our primary auction and the secondary market,” she said in a Viber message.

She said the Bureau of the Treasury (BTr) will continue to issue benchmark tenors that will be formulated “based on our debt management strategy while taking into account and assessing the demand of our investors.”

Earlier this month, JPMorgan tagged Philippine peso-denominated government bonds as “Index Watch Positive,” which is the final review phase for inclusion in its GBI-EM series.

JPMorgan said it will conduct its Index Watch assessment and provide updates by the first quarter of 2026.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said inclusion in JPMorgan’s watchlist means “big investors” are keeping a close eye on the Philippines.

“To get in, the government needs to make our bonds easier to buy and sell, especially for foreigners. If we succeed, more money could flow into the country, helping lower interest rates and fund public projects more cheaply,” he said in a Viber message.

Mr. Ravelas said the Treasury should focus on offering three-year, five-year and 10-year bonds next year since these are “the most attractive to global investors.”

“BTr should focus on increasing the liquidity and size of benchmark bonds (especially five-, seven-, and 10-year tenors), adopt global settlement systems, and sustain macroeconomic stability,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.

Mr. Rivera said these efforts will attract more foreign investments as well as boost demand and lower yields.

“Next year’s issuances should prioritize long-dated, high-volume benchmark bonds and possibly include ESG (environmental, social and governance)-linked securities to diversify the investor base and meet index inclusion criteria,” he said.

Meanwhile, Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. said the Philippines’ inclusion in the index will help the government borrow abroad more easily.

“In general, it means the cost of borrowing for our investments will be lower. That should be good for growth. And we’re hoping the growth will spread to the lowest level,” he said in an interview on Thought Leaders with Cathy Yang on One News. — Aaron Michael C. Sy, Reporter