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Headlines
- The Philippines is negotiating with JPMorgan Chase & Co. to include its peso bonds in the bank’s emerging-market debt index.
- Inclusion in this index could lead to significant new foreign capital inflows into the country's debt market.
- The discussions come after the Philippines' local-currency debt was recently removed from the index due to liquidity issues.
The Philippines is in discussions with JPMorgan Chase & Co (NYSE:JPM). to have its peso bonds included in the US bank’s emerging-market debt index, which is closely monitored by global funds managing billions of dollars. Finance Secretary Ralph Recto has confirmed that these talks are underway and is awaiting further updates.
Being added to such an index is often a pivotal moment for emerging economies, as it usually results in increased foreign capital entering their debt markets. For instance, India joined the index in late June, having been under consideration for inclusion three years prior.
For Manila officials, these negotiations could signify a significant shift, coming only months after the country's local-currency debt was removed from the index. The liquidity of the Philippines' peso bonds has been a concern, as local investors tend to hold them until maturity, limiting their availability in the market.
The Philippines is not alone in facing such challenges. In recent years, other countries have also been removed from the index, such as Russia in 2022 following the Ukraine invasion and Egypt earlier this year due to severe foreign exchange shortages.
