THE Philippines is eyeing higher foreign holdings in peso-denominated government bonds, boosted by the possible inclusion in the JP Morgan bond index.
On the sidelines of the Philippine Development Forum last Monday, National Treasurer Sharon P. Almanza told reporters that having a bigger foreign participation rate is better.
‘We want to increase participation. But since we haven’t really seen before that it’s too high, we want to manage the impact volatility in terms of rates domestically and peso,’ Almanza said, adding that a 10-percent foreign participation rate is also a ‘good number.’
According to the Bureau of the Treasury (BTr), foreign ownership of peso-denominated government bonds amounted to $12.78 billion or roughly P728.46 billion.
The foreign participation rate has more than tripled, increasing from 1.8 percent in 2021 to 6.03 percent as of August 2025.
Almanza said foreign holdings of government bonds rose from P400 billion at the start of the year to over P700 billion.
However, Almanza said: ‘We also have to manage the volatility because this month, although in and out, we’ve seen sell-offs, especially the fast money or hedge funds.’
The sell-off, Almanza noted, is not isolated to the Philippines, as even regional counterparts are experiencing the same.
The alleged corruption unveiling in the government is also not seen as a factor that could hinder the Philippines’ possible inclusion in the JP Morgan bond index, Almanza added.
‘It’s not because of the corruption issue [here], but it’s really because of the United States. This is more of an external development than domestic,’ Almanza said.
The Philippine Peso-denominated government bonds (RPGBs) have been placed on Index Watch-Positive for potential inclusion in the widely tracked JP Morgan Government Bond Index-Emerging Markets (GBI-EM) series.
Being placed on the positive watchlist signals the possible inclusion in the bond index, which is a key benchmark for international investors.
Entry into the index could expand the country’s investor base, deepen the market and reduce reliance on foreign currency borrowings to support growth.
If the Philippines were included, it would have a weight of about 1 percent of the GBI-EM Global Diversified Index, covering government bonds issued since 2023 with tenors of up to 20 years.
The watch period is expected to run six to nine months, with updates and rebalancing estimates due in the first quarter of 2026.