MANILA: The prospect of an interest-rate cut in the Philippines is powering a rally in the nation’s bonds, putting them ahead of Indonesia’s as monetary policy outlooks take center-stage for investors.
The benchmark 10-year Philippine bond yield has slumped since the start of May while the Indonesian equivalent stayed elevated, widening the gap to the most since September 2022. Their yields are likely to diverge further as Bangko Sentral ng Pilipinas gears up for a rate cut as early as August, while fiscal deficit and currency concerns weigh on Indonesian bonds.
