Infrastructure sector seen to regain bond mart sweet spot
The infrastructure sector is poised to regain momentum in the bond market this year as public spending normalizes and borrowing costs remain stable, according to Bank of America (BofA).
The Philippine economy posted disappointing growth in 2025 following a sharp contraction in government infrastructure spending, as tighter oversight and implementation reviews slowed project rollouts.
But this year, BofA Philippines country head Vince Valdepeñas said infrastructure and utility firms would likely reengage the debt market, particularly as the Philippine bond market remained firm and investor appetite resilient.
“We expect financials and high-grade corporates to lead refinancing after 2024-2025 prints and to lock in a friendlier rate path. Infrastructure and utilities should reengage as public spending normalizes,” Valdepeñas told the Inquirer in an interview.
Within infrastructure, digital and transportation segments are seen leading the recovery.
“Digital infrastructure comprising data centers, cloud services and energy continue to be the fastest-growing areas. These are followed by transportation-related infrastructure, which is fundamental to growth in the Philippines,” he said.
Valdepeñas added that stable market access and narrowing yields could provide the backbone for a restart in capital expenditures across infrastructure and utility firms. The tight yields, in turn, would also give cheaper long-term funding not just for the national government but also for agencies, local governments and private companies.
Other hot sectors
Should funding conditions remain stable, infrastructure bond issuance could play a key role in supporting the country’s economic recovery this year, which BofA projects at 4.6 percent.
Beyond traditional infrastructure, Valdepeñas added that trade-linked sectors may also tap the bond market in 2026.
“Export-adjacent tech and electronics may opportunistically term out given resilient Asia trade and the AI-driven semiconductor upcycle lifting regional flows,” he said.
As it stands, Philippine exports continue to power through a lackluster economy, with the trade gap narrowing further.
Electronics remain the country’s top export product, accounting for more than half of total exports last year.
Economists have already noted that robust demand for these products is helping cushion the impact of political and global uncertainties both at home and abroad.
