The Philippines will adopt an international pricing convention for peso-denominated government bonds from Jan. 4, 2027, and these bonds are scheduled to enter J.P. Morgan's GBI-EM index later that month, which could broaden the investor base and improve liquidity. The author welcomes these reforms but argues that a more sophisticated financial system alone will not create factories, exports or jobs, since businesses also need competitive electricity, infrastructure, logistics and predictable policy. Index inclusion does not guarantee lower yields, and the benefits of cheaper borrowing depend on how well public investment is selected and governed. The bigger gap is in corporate capital markets: according to an OECD 2024 review, outstanding corporate bonds were about 11% of GDP at end-2023, leaving smaller firms reliant on bank loans. The author calls for lower issuance costs, simpler procedures, better credit information and stronger disclosure without weakening investor protection.
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- Financial reform is necessary , but not sufficient - BusinessWorld Online
The Philippines will adopt an international pricing convention for peso-denominated government bonds from January 4, 2027, and these bonds are scheduled to enter J.P. Morgan's GBI-EM index later that month, which could broaden the investor base and improve liquidity. The author argues these reforms are welcome but not sufficient, since businesses also need competitive electricity, reliable infrastructure, efficient logistics and predictable regulation to make investment profitable. Index inclusion does not guarantee lower yields, and foreign investment in existing bonds differs from investment in new factories, so the payoff depends on how public funds are spent and governed. The OECD noted that outstanding corporate bonds were only about 11% of GDP at end-2023, leaving smaller firms reliant on bank loans. The piece calls for lower issuance costs, simpler procedures, better credit information and stronger disclosure without weakening investor protection.
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