BTr: Philippine nears re-entry in JP Morgan bond index

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February 23, 2026 | 12:00am

MANILA, Philippines — The Philippines may be nearing its re-inclusion in a major global bond benchmark as the Bureau of the Treasury (BTr) expects an announcement from J.P. Morgan Chase & Co. as early as this quarter, while continuing efforts to deepen the local debt market and diversify funding sources.

National Treasurer Sharon Almanza said an announcement on the country’s possible re-inclusion in the J.P. Morgan Government Bond Index–Emerging Market (GBI-EM) series could come soon, although actual inclusion would still come at a later stage.

“They will make an announcement soon, but that will only be the announcement and not the actual inclusion,” Almanza said. “We’re on positive watch, so if they announce, it could be positive.”

In September last year, J.P. Morgan placed Philippine government securities on its positive watchlist, marking the last step before a potential upgrade to the GBI-EM Global Diversified Index.

The GBI-EM is a widely tracked benchmark that measures local-currency government bonds from emerging economies and is used by global investors as a guide for allocating funds to these markets.

Should the Philippines be included, peso bonds will account for around one percent of the GBI-EM Global Diversified Index. For potential inclusion in the index are Philippine government bonds issued from 2023 with tenors up to 20 years.

Almanza said the Philippines has made progress in meeting key market requirements, particularly in improving liquidity and aligning market practices with global standards.

“Not all the requirements, but we’ve made strides. There are a lot of improvements,” she said.

J.P. Morgan earlier said that putting the Philippines on its positive watchlist followed market reforms in recent years, including the revival of the repurchase (repo) market, the development of the Philippine peso interest rate swap market and streamlined tax treaty procedures.

Still, Almanza said authorities are working on remaining technical issues, including pricing conventions in the local bond market.

“We incorporate tax on premium. The withholding tax is part of the computation for premium and discount,” the treasurer said. “We’re also trying to align with how other countries treat withholding tax.”

She explained that in many markets, bonds are quoted at gross prices, with taxes treated separately, while local practice embeds withholding tax in the price. The government is now working with industry players on how to transition toward global pricing standards.

Meanwhile, the BTr is also exploring the issuance of sukuk bonds as part of efforts to diversify funding sources, with discussions underway on identifying suitable underlying assets.

“We have to identify the assets that can be used. We’re working with the Privatization and Management Office (PMO) to determine which assets may be utilized for sukuk,” Almanza said.

She added that the PMO is helping identify assets that may be used for the planned Islamic bond structure, particularly those that cannot be privatized.

“For assets that cannot be privatized, we have to determine which ones can still be used. That’s why the work is still ongoing,” she said.