Outstanding peso-denominated bonds further shrank before 2025 ended as the government front-loaded borrowings at the start of the year while the Bangko Sentral ng Pilipinas (BSP) also reduced debt securities, according to the Manila-based multilateral lender Asian Development Bank (ADB).

The ADB’s latest Asia Bond Monitor for March 2026 showed that local currency (LCY) bonds outstanding in the Philippines declined by 0.7 percent quarter-on-quarter to ₱13.7 trillion at end-December 2025, a faster drop than the 0.1 percent recorded in the third quarter.

“The decline was mainly driven by a 43.6-percent quarter-on-quarter decline in the stock of central bank securities due to reduced issuance,” read the ADB report published on Wednesday, March 11.

On the other hand, outstanding treasury and other government bonds, along with corporate bonds, posted quarterly gains of 1.2 percent and 2.1 percent, respectively, in the fourth quarter, driven by issuance volumes exceeding maturities, the report said.

However, the ADB noted that bond issuances fell across the board from October to December, with total quarterly volume of ₱1.7 trillion—almost two-fifths smaller than the third quarter’s ₱2.9 trillion.

“Issuance of treasury and other government bonds posted contraction of 56.4 percent quarter-on-quarter as the government fulfilled most of its annual financing target in the preceding quarters,” the report said.

Corporate bond issuances slid 51.5 percent quarter-on-quarter, while central bank securities also dropped by 23.3 percent after the BSP discontinued its 56-day term deposit facility (TDF) last November.

The ADB noted that the investor profile in the Philippines’ LCY government bond market remained largely stable in 2025, with banks and investment houses remaining the largest group, increasing their share to 46.4 percent by year-end.

Holdings by brokers, custodians, and depositories rose to 12.9 percent, while foreign holdings inched up to 4.8 percent, supported by improvements in market liquidity and optimism over potential inclusion in JPMorgan’s Government Bond Index for Emerging Markets (GBI-EM). The ADB said market participants are expecting a final decision on the proposed one-percent inclusion this month.

Meanwhile, the share held by contractual savings and tax-exempt institutions fell to 21.2 percent, largely due to the BSP’s reverse repo operations forming part of its open market operations.

ADB data also showed that the Philippines’ outstanding sustainable bonds reached $16 billion at the end of 2025, marking a 41.9 percent year-on-year increase and raising its share of emerging East Asia’s total sustainable bond market to 2.1 percent.

According to the ADB, strong investor demand supported growth in sustainable bond financing, with $5.9 billion in new issuance from both private (accounting for 53.3 percent) and public (the remaining 46.7 percent) sectors, most public-sector bonds having tenors exceeding five years.