PHL return to emerging market bond index may take two to three years

THE PHILIPPINES’ peso-denominated government issuances could be included in investment bank JPMorgan Chase & Co.’s emerging markets bond index within the next two to three years, National Treasurer Sharon P. Almanza said late on Tuesday.

“Usually, it takes two to three years when you get onboarded and are added to their watchlist. It’s not that easy to get in. If we get approved this year, we’ll be in,” Ms. Almanza told reporters on the sidelines of a Palace event.

“We will know if we are approved by next month. They will release the results by October,” she added.

Ms. Almanza said the Philippines’ inclusion will need to be approved by a certain percentage of investors reviewing the index.

The Philippines is in talks with JPMorgan for the inclusion of its peso bonds in the bank’s emerging-market debt gauge, Finance Secretary Ralph G. Recto told Bloomberg News last month. The country’s global peso notes dropped out of the index in January due to illiquidity.

The Philippines’ inclusion in the debt gauge will help boost market liquidity, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

“Rejoining the JPMorgan bond index could boost investor interest in Philippine government bonds, potentially lowering borrowing costs and improving market liquidity,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Philippine bonds could attract more demand and fetch lower yields if they are included in the index, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He added that peso bonds will have a more diverse investor pool as a result as the index will give the Philippine government’s issuances international exposure.

“This would thereby expand the sources of funding for Philippine National Government borrowings to finance the budget deficit,” Mr. Ricafort said. — A.M.C. Sy