Market Summary

Yield Movements

Bangko Sentral ng Pilipinas' (BSP) dovish monetary policy stance has driven the Philippines' local currency (LCY) government bond yields down for most maturities between 1 September and 31 October. Since April 2025, the BSP has cut policy rates by a cumulative total of 100 basis points to foster economic expansion, lowering the overnight reverse repurchase rate to 4.75%. The BSP is expected to ease policy rates further in December and possibly into 2026 amid slowing economic growth.

Local Currency Bond Market Size and Issuance

At the end of September, outstanding LCY bonds posted a marginal decline of 0.1% quarter-on-quarter (q-o-q) to PHP13.8 trillion amid moderating growth in the stock of government bonds (0.1% q-o-q) and a contraction in central bank securities (-17.4% q-o-q). Meanwhile, outstanding corporate bonds rebounded at 7.8% q-o-q fueled by increased issuance amid low borrowing costs. In the third quarter (Q3) of 2025, total LCY bond issuance accelerated to 7.3% q-o-q, totaling PHP2.9 trillion propelled by favorable interest rate environment.

Sustainable Bond Market

The Philippines' outstanding sustainable bonds grew 7.6% q-o-q to USD15.4 billion at the end of September, supported by robust issuance during the quarter. Due to strong investor demand, issuers increased their bond offerings in Q3 2025, lifting the total issuance amount to USD2.2 billion, more than thrice the previous quarter's level. The Philippines' sustainable bond market accounted for 2.1% of emerging East Asia's total sustainable debt stock at the end of Q3 2025.