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Manila Bulletin devider Business devider Banking & Finance devider BSP's dovish pivot propels gov't debt trading to record ₱12.7 trillion

BSP's dovish pivot propels gov't debt trading to record ₱12.7 trillion

Published Feb 9, 2026 12:01 am  |  Updated Feb 7, 2026 11:26 am
Trading in Philippine government securities reached a record ₱12.68 trillion last year, a resurgence that signals deepening liquidity and market resilience as the central bank pivoted toward a more accommodative monetary policy.
According to the Bureau of the Treasury (BTr), the total volume of traded debt papers rebounded from a period of subdued post-pandemic demand, fueled by the steady supply of Treasury bills and bonds.
This was supported by the bureau’s strategy to standardize and consolidate securities, which helps shape the yield curve, improve pricing, and boost market transparency.
“Trading in the secondary market has become more evenly distributed across maturities, reflecting deeper market resilience,” the BTr said in a statement last Friday, Feb. 6.
Among the major factors contributing to the resurgence and rebalancing of trading activity was the Bangko Sentral ng Pilipinas’ (BSP) shift toward a dovish policy stance.
The BTr said the recent policy easing, which began in 2024, prompted a move away from longer-dated securities toward a more balanced distribution of trading across the short, medium, and long sections of the yield curve.
National Treasurer Sharon P. Almanza said the strong performance of the secondary market is “the clearest validation of our long-term strategy to deepen the government securities market.”
“By building reliable benchmarks, modernizing market infrastructure, and working closely with our primary dealers, we are creating a market that is more liquid, transparent, and resilient,” Almanza added.
Foreign investor participation in government bond sales climbed to nearly five percent in 2025 from around two percent in 2023, signaling stronger foreign interest and improved market access.
This progress has gained international recognition, earning a watch-positive status for potential inclusion in the JP Morgan Government Bond Index–Emerging Markets (GBI-EM). Inclusion in the index is expected to attract more global investors, boost market liquidity, and help lower borrowing costs.
Upcoming ₱30 billion bond sale
Following the record-breaking market growth, the Treasury is set to launch a ₱30 billion issuance of 10-year fixed-rate treasury notes (FXTNs).
Maturing in 2036, the offering features an integrated exchange offer designed to mitigate refinancing risks by allowing holders of five specific bond series—FXTN 05-77, FXTN 03-29, RTB 10-05, RTB 15-01, and FXTN 03-30—to transition into the new long-term benchmark.
Market participants may participate during the public offer period, which begins Feb. 18, immediately following a Dutch auction to determine the final interest rates. The offer period is scheduled to conclude on Feb. 20, with the final issue and settlement date set for Feb. 23.
Primary dealers are limited to a maximum bid volume of ₱10 billion per interest rate, with a total of 20 bids permitted across all rates.
To encourage broad participation, the BTr has set tiered entry points: a minimum denomination of ₱10 million for the public offer and a more accessible ₱5,000 minimum for the exchange offer.
These new notes are expected to enhance market liquidity and provide critical price discovery for the local economy.
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