Everyone seems gung-ho about the Philippines entering the JPMorgan Government Bond Index on Jan. 29, 2027. Murmurs among bank treasurers, however, raise concern about the steep price that must be paid—not just by the banks but the investing public, or the bondholders, as well.
We’re talking about the country’s commitment to align the local bond computation with international standards, and the push to implement such a new convention by Sept. 15, in order to join the index.
In a nutshell, the proposed amendment in bond pricing removes the price adjustment between the gross principal and net principal. Market players fear that such an adjustment could gnaw on the profitability of banks that hold government securities in their trading books. Their retail investors and trust clients may also take a hit.
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But some market players lament that banking regulators have not issued (and may not issue) any circular to require this change in bond convention, which has been in place since the 1990s. They want the shift to emerge as a “market initiative.”FEATURED STORIES
