Expanding bond market access for Philippines businesses

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October 18, 2026 | 12:00am

MANILA, Philippines — For a company seeking money to expand, issuing bonds means asking investors to believe it can keep a promise: pay interest on schedule and return their money when the debt falls due.

For investors, the challenge is deciding how much confidence to place in that promise, particularly when the borrower is a smaller business or a company entering the bond market for the first time.

Bridging that information gap is part of what could bring more Philippine companies into the domestic debt market, according to Wendy Cheong, managing director and regional head of Asia Pacific at Moody’s Ratings.

In an interview with The STAR, Cheong said independent credit analysis, stronger market infrastructure and broader investor participation could help develop a market capable of meeting more of the country’s financing needs.

“For smaller companies and first-time bond issuers, investor confidence, transparency and effective communication of credit risk are often critical,” she said.

“Independent credit ratings can help market participants better understand credit profiles and support informed investment decisions,” Cheong added.

Bonds allow companies to borrow from investors for an agreed period. They provide another source of financing alongside bank loans, giving businesses a way to raise funds for expansion and other investment requirements.

Before committing money, however, investors need to understand the borrower’s financial position and the risks that could affect repayment.

Credit ratings provide an independent assessment of that ability to repay. They help investors evaluate risk, although they do not guarantee that a borrower will meet its obligations.

For companies seeking funding, a clearer assessment of their financial strengths and vulnerabilities can help them explain their business to potential lenders.

“Over time, as the Philippine domestic bond market continues to develop, independent credit ratings can help reduce information gaps between issuers and providers of capital by offering transparent and consistent assessments of credit risk,” Cheong said.

“This can support issuers in communicating their credit profiles more effectively and help investors make more informed decisions,” she said.

Moody’s is expanding its participation in that process through its investment in Philippine Rating Services Corp. (PhilRatings). It completed the acquisition of a direct, non-controlling 19.99-percent stake in September, making PhilRatings the sixth domestic credit rating agency in its Asia-Pacific affiliate network.

Over the first 12 to 24 months, Moody’s expects the relationship to involve exchanges of analytical knowledge, learning and development initiatives and engagement with industry participants.

Cheong said Moody’s would share practices, knowledge and expertise for informational and reference purposes. PhilRatings could apply these resources to strengthen its analysis, processes and staff capabilities, alongside market education and dialogue with regulators.

PhilRatings will retain its own management, governance structure, rating methodologies and analytical processes.

The arrangement offers a channel for sharing expertise while preserving responsibility for independent rating decisions.

Cheong did not identify a specific reduction in borrowing costs or a target number of new bond issuers arising from the investment.

The broader opportunity, she said, lies in the Philippines’ continuing need for capital.

Moody’s cited more than $100 billion in planned Philippine infrastructure investment over the next three years, based on government plans under the Philippine Development Plan 2023 to 2028.

Funding would come from several sources, including government budgets, bank lending, public-private partnerships and capital markets.

“More broadly, continued efforts to improve market accessibility, liquidity and price discovery will help deepen the Philippine bond market,” Cheong said.

Among the priorities she identified were strengthening the government securities repurchase market and improving the formation of a benchmark yield curve.

A government bond yield curve shows the returns available across different borrowing periods, providing a reference when pricing other debt, including corporate bonds.

Cheong also pointed to reducing tax and operational barriers and expanding investor participation. She described the Capital Markets Efficiency Promotion Act and streamlined tax-treaty procedures for foreign investors as positive steps.

Alongside these improvements, she said regulation of credit rating agencies should reflect the Philippine market’s size and stage of development while remaining aligned with international standards.

“Strong governance, transparency, analytical independence and investor protection are important to the development of a trusted credit market,” Cheong said.

For companies looking to borrow and investors deciding where to place their money, those foundations matter. Better information helps investors assess repayment risks, while clearer pricing and easier trading can make the market more accessible.

Together, these improvements could help more Philippine businesses turn their investment plans into financing opportunities.