The Philippines has been placed on a positive watchlist by J.P. Morgan Chase & Co. for potential inclusion in its influential emerging market government bond index, a move that could attract a new wave of foreign investment and lower the nation's borrowing costs.

In a statement on Monday, Sept. 15, Finance Secretary Ralph G. Recto announced the development, which puts the country’s peso-denominated government bonds, or RPGBs, in the final review phase for inclusion in the J.P. Morgan Government Bond Index–Emerging Market (GBI-EM) series.

The index is the industry standard for tracking local-currency emerging market debt and is followed by global fund managers.

“This is a promising development for the Philippines as the potential inclusion of our government bonds into this global index means increased capital inflows and therefore more funds for the government to better serve Filipinos,” Recto said.

If included, the Philippines would have an estimated weight of about one percent in the GBI-EM Global Diversified Index, according to a J.P. Morgan report dated Sept. 12. The bank also placed Saudi Arabia’s sukuk bonds on its positive watchlist.

Inclusion in the index is expected to attract a wider range of foreign investors to the country’s local bond market, which has historically been less accessible to global capital compared with its dollar-denominated bonds.

This influx of capital could increase liquidity, reduce government borrowing costs, and free up resources for public services and infrastructure.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. hailed the news, saying it is “a testament to the work the government and financial market leaders has done especially in the last few years to expand our capital markets.”

J.P. Morgan cited “proactive market reforms” implemented over the past three years as key drivers for its positive assessment. These include streamlining tax treaty procedures, reviving the repurchase agreement market, and launching the Philippine peso interest rate swap market.

The investment bank also noted improvements that have garnered positive feedback from investors, such as the accessibility of the RPGB market via the Brussels-based clearing house Euroclear and enhancements in secondary market liquidity through the consolidation of benchmark tenors.

These reforms have contributed to a doubling of foreign ownership of RPGBs, from 1.8 percent in 2021 to 5.2 percent as of June 2025.

J.P. Morgan expects its Index Watch assessment to run for six to nine months, with updates anticipated in the first quarter of 2026.

The Philippines was previously removed from similar JPMorgan index due to declining liquidity. This time, the government is working to ensure a sustained presence. The Index Watch assessment is expected to take six to nine months, with updates anticipated in the first quarter of 2026.

If the Philippines is successfully included, analysts believe the move could attract an estimated $10 billion to $12 billion in fresh investments, which would reduce the government’s borrowing costs and free up resources for public spending.