Philippines adopts global bond pricing convention in January 2027

The Philippines will adopt an international pricing convention for settling trades in peso-denominated government bonds on Jan. 4, 2027, with regulators and market participants committing to complete the necessary rules and systems before the end of 2026.

The reform aims to attract more investors and make government bonds easier to trade, potentially lowering public borrowing costs and freeing funds for infrastructure and services without changing bondholders’ scheduled payments or tax obligations.

The Bureau of the Treasury (BTr), Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and Philippine Dealing and Exchange Corp. (PDEx) are leading the initiative with seven industry associations.

These are the Bankers Association of the Philippines (BAP), Trust Officers Association of the Philippines (TOAP), Fund Managers Association of the Philippines (FMAP), and Money Market Association of the Philippines (MART).

Also participating are the National Association of Securities Brokers Inc. (NASBI), Philippine Investment Funds Association (PIFA), and Philippine Life Insurance Association (PLIA).

Work on the project, including consultations with investors and other market participants, intensified in 2026 to prepare for the transition.

PDEx will incorporate the pricing convention into its revised fixed-income market rules and trading conventions, while the BSP, SEC, and IC will assist financial institutions, the industry, and the public through the change.

Financial institutions and other relevant market participants are expected to carry out the necessary transition activities from Jan. 1 to 3, 2027.

Investors who hold their bonds to maturity will experience no actual impact, according to the joint announcement, which said most individual Philippine bondholders fall into this category.

Some investors may see changes in how the settlement value of government bonds is computed under the new convention.

Tax obligations and the bonds’ contractual terms will remain unchanged, with holders continuing to receive scheduled interest payments, or coupons, and principal at maturity under their existing terms.

The agencies and industry groups said alignment with common international practice should make Philippine government bonds easier to buy and trade, supporting greater global demand.

Market participants with questions are encouraged to contact their dealers, sales brokers, trust institutions, or banks.

A broader investor base would deepen market liquidity, making it easier to buy and sell bonds and potentially allowing the government to borrow more efficiently and at lower rates, the announcement said.

Lower public borrowing costs could create more budget room for infrastructure and services, while more active trading could improve price discovery and bond valuations, benefiting bondholders and strengthening investor confidence.

Over time, the groups said, lower private-sector borrowing costs could help businesses expand, invest, and create jobs, while making major investments and purchases more affordable to finance for households.

They said these benefits could support broader economic opportunities and stronger growth.

Finance Secretary Frederick D. Go placed the change within the government’s wider financial reforms.

“This reform is part of our broader effort to modernize the Philippine financial system. Aligning with international standards makes it easier for the Philippines to compete for capital in an increasingly integrated global financial system.”

BSP Governor Eli M. Remolona Jr. said the reform would expand financing and investment options.

“A deeper and more liquid capital market provides more investment opportunities while giving businesses additional ways to raise funds. A more robust bond market complements bank credit and helps make the Philippine financial market and economy more resilient.”

Treasurer of the Philippines Sharon P. Almanza linked wider participation to more productive public spending.

“This is an important step in making the Philippine bond market more accessible and attractive to international investors. Broader participation in the government bond market will help lower borrowing costs, enabling the government to finance more productive spending, including public infrastructure and services,” she said.

SEC Chairman Francis Lim said familiarity with the pricing approach could encourage global investors to trade Philippine bonds.

“By making Philippine bond pricing more familiar to global investors, we hope to encourage more trading, developing a more active secondary market for Philippine bonds. This will not only benefit the government but, eventually, Philippine businesses that need to raise money and Philippine investors seeking more investment options.”

Insurance Commission Officer-in-Charge Ermar U. Benitez said insurers and other entities supervised by the agency could gain greater flexibility in managing investments.

“This transition is expected to enhance liquidity in the bond market, providing IC-regulated entities greater flexibility in managing their investment portfolios while ensuring their continued ability to fulfill their obligations to policyholders and beneficiaries.”

The initiative follows J.P. Morgan’s announcement that Philippine peso-denominated government bonds will join its Government Bond Index – Emerging Markets series on Jan. 29, 2027.