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Peso GS Weekly: Bonds rally on index inclusion buzz
JP Morgan’s positive watch on PH bonds sparked a strong rally last week
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
Starting the week, local bonds surged after JP Morgan placed the Philippines on Index Watch-Positive for potential inclusion in the GBI-EM, signaling possible inflows of USD 2–2.5 billion. This news fueled strong demand for 5- to 10-year benchmarks, with the 10-year 10-73 leading the rally, closing at 5.92%, down by 5.25 basis points (bps). Treasury bill auctions also saw robust interest, with awarded yields dropping by 7–10 bps as investors redeployed excess liquidity.
Mid-week, momentum carried into mid-week as the Bureau of the Treasury’s (BTr) PHP 25 billion reissuance of 10-73 attracted heavy bidding, clearing at 5.907% with a bid-to-cover ratio above
3x. Ample liquidity from recent maturities and optimism over index inclusion kept yields supported, while secon
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