The Philippines plans to change the way it prices local-currency bonds by removing the impact of withholding tax, a shift that may saddle some existing investors in the nation's $230 billion market with losses, according to people familiar with the matter.

The reform aims to align the country's bond pricing methodology with international standards ahead of its anticipated inclusion in the JPMorgan Government Bond Index-Emerging Markets. Currently, Philippine bonds are quoted on a gross-yield basis that includes the 20% withholding tax applied to foreign investors, creating a discrepancy with global peers.

By switching to a net-yield convention that strips out the tax effect, the Bangko Sentral ng Pilipinas seeks to make the market more accessible to global funds tracking the benchmark. However, the transition could trigger mark-to-market losses for holders of existing securities priced under the old methodology.

Market participants are awaiting detailed implementation guidelines from the central bank and the Bureau of the Treasury, including the timeline for the switch and how outstanding bonds will be treated during the transition period.