Market Summary

Yield Movements

Market's anticipation of a policy rate cut in February drove the local currency (LCY) government bond yields down for short-term maturities between 3 November and 6 February. In the fourth quarter of 2025, the Philippines' gross domestic product growth slowed to a five‑year low of 3.0% year-on-year, leading to the Bangko Sentral ng Pilipinas to cut its policy rate by 25 basis points on 19 February to foster economic growth. On 5 February, the central bank also signaled that its easing cycle is nearing its end amid benign inflation conditions, driving the yields for long‑term securities to rise by an average of 12 basis points during the review period.

Local Currency Bond Market Size and Issuance

At the end of December, outstanding LCY bonds posted a marginal decline of 0.7% quarter-on-quarter (q-o-q) to PHP13.7 trillion. The decline was mainly driven by a 43.6% q-o-q contraction in the stock of central bank securities due to reduced issuance. Meanwhile, outstanding Treasury and other government bonds and corporate bonds recorded q-o-q gains of 1.2% and 2.1%, respectively, as issuance volume surpassed maturities. In the fourth quarter of 2025, reduced bond sales were recorded across all bond segments which pushed the total LCY bond issuance to fall 39.8% q-o-q to PHP1.7 trillion.

Sustainable Bond Market

The Philippines' outstanding sustainable bonds expanded 41.9% year-on-year to USD16.0 billion at the end of 2025. The expansion was supported by strong investor demand, with total sustainable issuance tallying USD5.9 billion in full-year 2025, roughly the same as the previous year's issuance volume. This lifted the Philippines' market share in emerging East Asia's total sustainable bond market to 2.1% from 1.6% in the previous year.