Foreign investors boost PHL bond purchases amid reforms and falling inflation

Foreign investors are increasing their purchases of Philippine government bonds, a trend supported by market-friendly reforms and falling inflation.

Overseas ownership of peso-denominated government debt rose to 6.03 percent in August from 4.2 percent at the end of 2024.

The Bureau of the Treasury attributes this increase to efforts to engage international investors and implement reforms to enhance market liquidity and accessibility.

Analysts suggest that the Bangko Sentral ng Pilipinas's substantial policy rate cuts, driven by declining inflation, and the possibility of inclusion in a major bond index are key factors.

J.P. Morgan expects the Philippine economy to expand by 5.3 percent this year and five percent in 2026, outpacing most of its Southeast Asian peers.

J.P. Morgan ASEAN equity strategist Khoi Vu stated that the Philippines' relatively low dependence on exports makes it more resilient to external shocks compared to neighbors.