JPMorgan index debut to bring $5B inflows

The Philippines has secured its entry into one of the world’s most influential emerging market bond indices, opening the door to billions of dollars in potential foreign inflows into the local bond market.

JPMorgan on Thursday announced that peso-denominated sovereign bonds would be added to its Government Bond Index–Emerging Markets (GBI-EM), seven months after placing the country on “positive watch.”

Nine eligible Philippine government bonds, worth about $49 billion, will officially enter the index on Jan. 29, 2027.

Finance Secretary Frederick Go is expecting about $5 billion, equivalent to roughly P290 billion, in foreign funds to flow to the local debt market with this inclusion. This estimate is based on the size of the GBI-EM fund and the Philippines’ projected index weight of 1.78 percent once fully phased in.

“We welcome the Philippines’ first-ever inclusion in the JPMorgan Government Bond Index for our peso-denominated government bonds. It reflects a strong vote of confidence in our solid fundamentals and fiscal discipline,” Go said in a statement.

“This milestone will broaden our investor base, improve market liquidity and help lower borrowing costs,” he added.

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr., meanwhile, said the inclusion marked a “major step in deepening the Philippine capital markets.”

“As bonds gain more liquidity, this will help the BSP transmit monetary policy, benefiting borrowers and investors across the economy,” Remolona said.

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Launched in 2005 and closely tracked by global fund managers, the GBI-EM covers 19 countries and serves as a key benchmark for local-currency sovereign debt.

The inclusion is expected to attract fresh capital, improve market liquidity and help ease government borrowing costs as foreign investors increase exposure to Philippine assets.

National Treasurer Sharon Almanza earlier said that the government has made significant progress in the bond market. These include improvements in tax treaty agreements and interest rate swaps.