The Philippines will adopt international pricing conventions for peso-denominated government bonds starting Jan. 4, 2024, excluding withholding tax from bond pricing to align with global benchmarks. This shift aims to attract more investors and reduce borrowing costs, ahead of JPMorgan Chase & Co.'s planned inclusion of Philippine local-currency debt in its emerging-market bond index.
By removing the 20% withholding tax from bond pricing calculations, yields will better reflect underlying market conditions and become more comparable to international standards. The government emphasized that tax obligations remain unchanged, though settlement value computations may differ for some investors.
Officials believe the reform will deepen the country's debt capital market and enhance competitiveness for global capital. Central Bank Governor Eli Remolona noted that a more robust bond market complements bank credit and strengthens financial resilience. Finance Secretary Frederick Go stated that aligning with international standards helps the Philippines compete in an integrated global financial system.
All relevant regulations and systems are expected to be in place before end-2026, without altering existing bond contractual terms.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing