THE PHILIPPINES continues to work towards its re-inclusion in JPMorgan Chase & Co.’s emerging market government bond index and hopes to be placed under “watch” status following the latter’s latest consultation survey.
“JPMorgan will conduct another round of Index Governance Consultation survey in May-June, and hopefully we will be under its ‘watch’ status,” National Treasurer Sharon P. Almanza said in a Viber message on Tuesday.
“During the last survey, taxation and secondary market liquidity were the key issues of investors,” Ms. Almanza added.
Ms. Almanza, along with other officials from the Bureau of the Treasury as well as the Bangko Sentral ng Pilipinas and the Department of Finance, last week met with representatives from JPMorgan to discuss the inclusion of Philippine bonds in its Government Bond Index-Emerging Markets (GBI-EM), the Treasury said in a statement.
“This marks the continuation of the consultation process with JPMorgan towards index inclusion which would increase potential capital inflows, representing a significant milestone for the country’s capital markets,” it said.
JPMorgan’s GBI-EM tracks the performance of sovereign and quasi-sovereign bonds issued by emerging market countries. The country’s inclusion will need to be approved by a certain percentage of investors reviewing the index.
The Philippines last year missed the cut for the bond index, Bloomberg reported in November. This came after JPMorgan in August last year asked investors if the Philippines should be placed on “Index Watch Positive,” which is a precursor for inclusion in the GBI-EM.
The Finance department last year said it hopes the Philippines could re-enter the GBI-EM by this year, as this would “enhance foreign investor access to peso-denominated government bonds, reduce friction costs, and strengthen the country’s investment attractiveness.”
Ms. Almanza last year said it could take the Philippines two to three years to re-enter the bond index after getting added to JPMorgan’s watchlist.
The Philippines’ global peso notes were removed from the GBI-EM in January last year due to illiquidity. — Aaron Michael C. Sy
