Philippines 10-Year Bond Yield Rises

The Philippines’s 10-year government bond yield rose to around 7.2% in mid-May, moving back toward an over three-and-a-half-year high, as peso bonds continued to weaken on large rate hike expectations. This followed headline inflation surging to a three-year high of 7.2% in April, well above the central bank’s 5.6%–6.4% forecast range, reflecting rapidly intensifying price pressures driven by higher energy costs and the country’s heavy reliance on Middle Eastern oil imports. As a result, markets have strengthened bets on a 50 bps rate hike at the June 18 policy meeting, driving a broader selloff in sovereign bonds. Philippine debt has since posted losses exceeding 10% for dollar-based investors since the start of the Iran war, making it the worst performer in emerging Asia, according to a Bloomberg index. Weak demand at recent government bond auctions further reinforces the softening investor appetite for sovereign debt.

Philippines 10 Year Government Bond Yield increased to 7.15%, the highest since November 2022. Over the past 4 weeks, Philippines 10Y Bond Yield gained 43.00 basis points, and in the last 12 months, it increased 87.30 basis points.

The Philippines’ 10-year government bond yield fell to below 6.9%, easing from a nearly two-year high after the central bank’s move to hold rates at its off-cycle meeting signaled a more cautious stance toward further tightening. National Treasurer Sharon Almanza said the move could help stabilize the bond market following recent weak auctions amid sharply higher yields. The pressure stemmed from rising inflation, fueled by a spike in oil prices from the Iran war, prompting the central bank to lift its 2026 inflation forecast to around 5.1%. Despite inflation risks breaching the 4% ceiling in the near-term, the BSP kept its policy rate steady at 4.25%, opting to assess the lagged impact of previous 225 bps of easing. Governor Eli Remolona noted growth is expected to remain weak, warning that further tightening could delay recovery. Still, policymakers signaled that upcoming March CPI data will be key to determining whether rate hikes could resume as early as April.