(Bloomberg) -- The Philippines is in talks with JPMorgan Chase & Co. for the inclusion of its peso government bonds in the US bank’s emerging-market debt gauge that’s tracked by billions of dollars worth of global funds.
Finance Secretary Ralph Recto told Bloomberg News that he knew there are discussions and that he was awaiting an update.
Joining the benchmark is typically a breakout moment for emerging economies, as the move attracts fresh inflows of overseas capital into their debt markets. India acceded to the gauge in late June, having been placed on watch for eligibility three years before.
For officials in Manila, the talks mark a potential turnaround after its global peso notes dropped out of the index due to illiquidity in January 2024. The Philippines has different types of local-currency notes.
“Everyone’s pushing for stronger capital markets for the Philippines,” said Helen Go Oleta, a fund manager at RCBC Trust Corp. The development would be welcome as it would “provide a very healthy two-way market.”
The Philippines is not the only country to have been removed from the index in recent years. Russia got excluded in 2022 following the invasion of Ukraine, while Egypt was cut earlier this year after suffering dire shortages of foreign exchange.
A spokesperson for the Wall Street bank did not respond to Bloomberg’s email and telephone call requesting comment.
--With assistance from Karl Lester M. Yap, Ronojoy Mazumdar and Mirette Magdy.
(Adds detail, investor reaction in fourth paragraph)
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