Market Summary

Yield Movements

Between 3 March and 30 May, local currency (LCY) government bond yield movements in the Philippines were mixed amid heightened global market uncertainty that poses downside risks to the economy's growth outlook. Yields fell an average of 7 basis points for maturities of 6 months to 5 years, driven by the central bank's continued monetary policy easing and its shift toward a more accommodative monetary policy stance to spur economic growth. Meanwhile, yields at the short-end and long-end of the curve rose an average of 17 basis points, largely tracking the yield movements of United States Treasuries.

Local Currency Bond Market Size and Issuance

At the end of March, LCY bond market reached a size of PHP13.5 trillion on growth of 4.1% quarter-on-quarter (q-o-q), supported by robust expansions of government bonds and central bank securities. Government bonds rebounded to expand 4.1% q-o-q in the first quarter (Q1) of 2025 on increased government borrowing, while central bank securities grew 15.3% q-o-q, posting the fastest rate of expansion among all bond types at the end of March. Meanwhile, total corporate debt stock contracted 2.8% q-o-q in Q1 2025 due to a high volume of maturities. LCY bond issuance recovered in Q1 2025, totaling PHP2.7trillion on growth of 13.7% q-o-q, driven by increased issuance from both the government and corporate sectors.

Sustainable Bond Market

Sustainability instruments continued to dominate the Philippines' sustainable bond market, making up 86.5% of the total sustainable debt stock at the end of March. Total outstanding sustainable bonds grew 20.6% q-o-q, reaching a size of USD13.6 billion in Q1 2025. Despite this growth, the Philippines' sustainable bond market is among the smallest in emerging East Asia, comprising only 2.0% of the region's total.