BTr: Graft probe not shaking investor trust
Despite the sweeping flood control corruption scandal darkening investor sentiment, the government says investors aren’t flinching, with demand for government securities (GS) holding firm.
In an interview, National Treasurer Sharon Almanza told reporters that key market indicators show no sign of weakened investor confidence, noting that the GS market remains “robust” given its recent performance.
“The GS market actually is rallying while the stock market is down. The GS market is very robust. Even our spread is still very tight,” she said.
Almanza added that borrowing costs remain steady and the appetite for government bonds is still strong.
“The spread of our domestic curve vis-à-vis US Treasuries, and even our ROPs, is still very tight. Our credit default swaps are also at their tightest. So, we haven’t seen any major widening of our spread,” she said.
Recent Treasury auctions also point to calm investor behavior, with yields on both short-term and longer-tenor bills and bonds remaining broadly stable.
This suggests that investors continue to take up government debt, with the national government already raising P2.08 trillion from domestic sources year-to-date—close to the P2.6-trillion program for 2025 to cover the projected P1.6-trillion budget deficit, equivalent to 5.5 percent of Gross Domestic Product.
The flood control corruption scandal has led to delays in key infrastructure programs, weighing on government spending and dampening market sentiment. Economists have warned that prolonged political noise could further weigh on economic growth.
Still, major credit watcher S&P Global Ratings recently affirmed the country’s long-term credit rating at BBB+ with a positive outlook, saying it expects the slowdown in growth to be temporary.
Almanza said that she remains optimistic that the Marcos administration’s promise to jail key scandal figures by year-end will help sustain investor confidence.
“I think the investigation has been progressing. So we’re really hoping that we address the concerns of our people and investors, and show that the system is working. Hopefully, those who are really part of that scandal will be jailed soon,” she said.
