PH considered for inclusion in J.P. Morgan’s index watch

J.P. Morgan said the Philippines would have a weight of about 1 percent of the GBI-EM Global Diversified Index, if included. (File Photo By Wikimedia Commons, CC BY 4.0)

By Anna Leah Gonzales, Philippine News Agency

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 Sept. 12, J.P. Morgan placed Philippine peso-denominated government bonds (RPGB) on its positive watchlist.

J.P. Morgan said this marks the final review phase for potential inclusion in its Government Bond Index for Emerging Markets (GBI-EM) series.

The GBI-EM, which covers about 19 countries, is the pioneer index for local-currency emerging market sovereign bonds, and is the most-followed by global fund managers and investors as a guide for where to invest.

J.P. Morgan said the Philippines would have a weight of about 1 percent of the GBI-EM Global Diversified Index, if included.

In a statement Monday, the Bangko Sentral ng Pilipinas (BSP) said the country’s inclusion in the index will help attract more foreign investments, increasing liquidity and lowering borrowing costs for the government and eventually the private sector.

While the Philippines has been able to raise funds from foreign investors through its dollar-denominated bonds since the early 2000s, the BSP said inclusion in the GBI-EM series is expected to help the government draw more foreign investors to its larger peso-denominated bond market.

“Getting on the positive watchlist is a testament to the work the government and financial market leaders has done especially in the last few years to expand our capital markets, particularly our local bond market. This news serves as further impetus to execute more changes and reforms,” BSP Governor Eli Remolona Jr. said.

J.P. Morgan noted positive feedback from GBI-EM investors, particularly on the accessibility of the RPGB market via Brussels-based clearing house Euroclear, as well as improvements in secondary market liquidity through the consolidation of benchmark tenors.

The latter refers to the Bureau of the Treasury’s moves to reissue select bonds rather than issue new bonds, thereby creating more liquid “benchmark” bonds that investors are more confident to invest in.

J.P. Morgan said that due to reforms, foreign ownership of RPGBs has doubled from 1.8 percent in 2021 to 5.2 percent as of June 2025.

However, J.P. Morgan said investors continue to seek further enhancements in secondary market liquidity and easing of tax hurdles.

The central bank said it supports efforts of the national government and industry stakeholders to further develop the domestic capital market.

J.P. Morgan said it expects to carry out its Index Watch assessment within six to nine months and to provide updates during the first quarter of 2026.

In a separate statement, the Finance department said the country’s inclusion will help lower borrowing costs, generate more jobs, and channel greater resources into classrooms, hospitals, and infrastructure that uplift Filipino families.

“This is a promising development for the Philippines as the potential inclusion of our government bonds into this global index means increased capital inflows and therefore more funds for the government to better serve Filipinos. This is an excellent opportunity for us to promote our capital markets to a wider range of investors,” Finance Secretary Ralph Recto said.