THE Department of Finance (DoF) said it pitched British investors to increase their exposure to Philippine bonds ahead of the Philippines’ return to the JP Morgan bond index.
“The Euro market has been a vital source of financing for the Philippines, with our bond offerings consistently attracting exceptional demand. This strong appetite has enabled us to tighten pricing and trade above our credit rating,” Finance Secretary Ralph G. Recto said in a keynote speech during the Philippine Economic Briefing in London on Oct. 31.
“It certainly makes strategic sense for us to increase our financial integration, especially as we enter JP Morgan’s Bond Index soon,” Mr. Recto said.
The re-inclusion of peso-denominated government bonds in the index will help boost investor interest in Philippine government bonds, potentially lowering borrowing costs and improving market liquidity, the DoF said.
Mr. Recto has said the Philippines has been working with JP Morgan to rejoin the index. It has been removed due to declining liquidity.
The Philippines issued its first zero-coupon Euro bond in 2020.
Mr. Recto also urged British firms to invest in the Philippines, citing its young workforce, with reforms for their upskilling boding well for foreign investment.
“The competitive advantage offered by our demographic sweet spot — a young median-age population of only 25 years — strategically makes us an ideal demographic partner for the UK whose median age is 40,” he said.
“We are committed to continuously upskilling our workforce through our Artificial Intelligence Strategy Roadmap to fully harness their talents and ensure that they can power up your forward-looking industries,” he added.
Mr. Recto also said that the Philippines’ high overseas remittances, tourist receipts and business process outsourcing revenues make it “resilient” during trade wars.
He noted that the government is expected to sign amendments to the Corporate Recovery and Tax Incentives for Enterprises Act, increasing the appeal of strategic projects like the Luzon Economic Corridor.
The corridor is expected to be a “perfect nexus for British investors involved in manufacturing, semiconductor supply chains, renewable energy, and sustainable agribusiness.”
He added that declining inflation and the continuation of the central bank’s easing cycle shows the Philippines is on track to achieve upper middle-income status next year.
“Coupled with this strong potential, our commitment to prudent economic and fiscal management ensures stability for British enterprises,” he said.
As of the end of July, the Philippines’ received £585.74 million (P44.22 billion) worth of investments from the UK. — Beatriz Marie D. Cruz