Philippines JPMorgan GBI-EM Re-Entry Moves Closer After Reforms

Philippines JPMorgan GBI-EM re-entry is a step closer after peso-denominated government bonds were placed on the bank’s “Index Watch Positive” list for its emerging market government bond index. Inclusion would give the Philippines a potential weight of around 1% in the Global Diversified Index, according to the Bangko Sentral ng Pilipinas and the Department of Finance. Manila was removed from the benchmark last year because of illiquidity, but reforms including the revival of repo and swap markets and the consolidation of benchmark tenors prompted the reassessment. Foreign ownership of peso bonds has since doubled to 5.2%. Officials said a decision is expected within nine months, and that re-entry would enhance liquidity, validate reforms and attract further foreign investment inflows.