Manila: The Philippines is officially being considered for inclusion in J.P. Morgan’s (JPM) emerging market government bond index, the most-followed index of its kind. In a report issued on September 12, J.P. Morgan placed Philippine peso-denominated government bonds (RPGB) on its positive watchlist, marking the final review phase for potential inclusion in its Government Bond Index for Emerging Markets (GBI-EM) series.
According to Philippines News Agency, the GBI-EM covers about 19 countries and is the pioneer index for local-currency emerging market sovereign bonds. It is extensively followed by global fund managers and investors as a guide for investment decisions. If included, the Philippines would have a weight of about 1 percent in the GBI-EM Global Diversified Index. The Bangko Sentral ng Pilipinas (BSP) stated that the country’s inclusion in the index would attract more foreign investments, increase liquidity, and lower borrowing costs for both the government and the private sector.
While the Philippines has successfully raised funds from foreign investors through dollar-denominated bonds since the early 2000s, the BSP highlighted that inclusion in the GBI-EM series is expected to draw more foreign investors to its larger peso-denominated bond market. BSP Governor Eli Remolona Jr. remarked that being on the positive watchlist is a testament to the efforts of the government and financial market leaders in expanding the capital markets, particularly the local bond market.
J.P. Morgan reported positive feedback from GBI-EM investors, especially regarding the accessibility of the RPGB market via the Brussels-based clearing house Euroclear and improvements in secondary market liquidity through the consolidation of benchmark tenors. The Bureau of the Treasury’s strategy of reissuing select bonds rather than issuing new ones has led to the creation of more liquid ‘benchmark’ bonds, which investors find more appealing.
J.P. Morgan noted that due to reforms, foreign ownership of RPGBs has increased from 1.8 percent in 2021 to 5.2 percent as of June 2025. However, investors still seek further enhancements in secondary market liquidity and easing of tax hurdles. The central bank expressed support for the national government’s and industry stakeholders’ efforts to further develop the domestic capital market.
J.P. Morgan anticipates carrying out its Index Watch assessment within six to nine months, with updates expected during the first quarter of 2026. In a separate statement, the Finance department noted that the country’s inclusion would help lower borrowing costs, create more jobs, and channel greater resources into essential services like education, healthcare, and infrastructure, benefiting Filipino families. Finance Secretary Ralph Recto emphasized that this development signifies increased capital inflows, providing more funds for the government to better serve Filipinos and promoting the country’s capital markets to a wider range of investors.