Analysts believe that the Philippines’ possible return to JPMorgan Chase & Co.’s Emerging Markets Bond Index (EMBI) could strengthen the peso through increased foreign investment inflows.
Nicholas Mapa, chief economist at Metrobank, noted that inclusion in the index would attract stable foreign capital, which would support the peso by reducing trading volatility.
Finance Secretary Ralph Recto confirmed that the Philippines is working with JPMorgan to reinclude peso-denominated government bonds in the index, potentially drawing $10 to $12 billion in new investments.
This move could also lower government borrowing costs, easing the debt burden and enabling more spending on infrastructure and social programs.
ING Bank added that a return to the EMBI might further boost the peso, which has been performing well against the yen and other currencies.
Source: PhilNews24 | September 12, 2024
