Investors are still flocking to government debt securities despite the stock market’s recent slump, owing to the deepening probe into the flood control cases, signaling a robust local bond market.

National Treasurer Sharon P. Almanza said the ongoing flood control mess has yet to make an impact on the demand for government securities

“We haven’t seen that [impact] yet. The government securities (GS) market is actually rallying while the stock market is down. The GS market is very robust,” Almanza told reporters on the sidelines of the launch of white paper on asset tokenization opportunities in the country.

Almanza explained the difference between the interest rates between the local bonds and the United States (US) bonds is “still very tight,” implying the national debt remains at a safe position at present.

She further said the interest rate differential between the US and local bonds remains very small, including for the country’s global bonds, while the cost of insuring Philippine debt is at its lowest, signaling strong market confidence in the country’s creditworthiness.

“We haven’t seen any major widening of our spread, and I think not right now,” Almanza said.

As the investigation on the alleged corruption in flood control funds deepens, Almaza is crossing her fingers for a just close, such as putting guilty individuals behind bars. She is hoping such a conclusion to the flood control saga will address the concerns of investors.

Meanwhile, three digital banks have reportedly expressed interest in integrating government bonds in their products, such as the recent launch of GBonds in e-wallet giant GCash.

“There are banks that want to incorporate bonds or government securities. Well, we’ve reached out to one, and another bank reached out to us on how they can [onboard as dealers government bonds to their clients],” Almanza told reporters.

Six digital banks are currently operating in the Philippines, namely Maya Bank, GoTyme Bank, Overseas Filipino (OF) Bank, UnionDigital Bank, UNObank, and Tonik Digital Bank.

“One of the banks also has an e-wallet, so they’re looking at it,” Almanza said, which she hopes to continue the digital bank’s plan. She added that this remains uncertain as it will depend on the bank’s readiness to connect with the Bureau of the Treasury (BTr)

Demand for GBonds, a version of Retail Treasury Bonds (RTB), has been growing rapidly by around ₱10 million on a weekly basis, Almanza said. Since its launch in August, GBonds now total about ₱1 billion.

PDAX CEO and Founder Nichel Gaba also told reporters that BondsPH, another fixed-income digital securities dealer, is also close to hitting ₱1 billion, accessed by nearly half a million clients.

While the Treasury could not project a figure by year-end, Almanza said the trend and momentum have been “encouraging.”

“Hopefully, we can also continue partnering with PDAX, because there are many e-wallets,” Almanza said.

GBonds are continuously offered on these platforms and are available as long as the Treasury still has issuance.