Philippines nears inclusion in J.P. Morgan EM bond index

The Philippines is in the final review stage for inclusion in J.P. Morgan's Government Bond Index for Emerging Markets (GBI-EM), a move expected to attract more foreign investors.

National Treasurer Sharon P. Almanza estimates that the country could see an additional P100 billion in foreign fund inflows if successfully included.

Philippine peso-denominated government bonds have been tagged as 'Index Watch Positive' by J.P. Morgan, indicating the last step before potential inclusion.

If included, the Philippines would hold a weight of approximately 1% in the GBI-EM Global Diversified Index.

J.P. Morgan cited proactive market reforms, including the revival of the repurchase (repo) market and development of the Philippine peso interest rate swap market, as reasons for the review.

Improved access to Philippine bonds via Euroclear, streamlined tax treaty procedures, and the government's strategy of consolidating benchmark tenors are also factors making peso securities more attractive.

Despite not yet being included, foreign participation in the government's bond issuances and capital markets has already increased, rising from 5% to 6% in August.