Pursuits
Default Swaps Show Optimism as Philippines Enters Election Year
- Net notional amount of debt protected fell 32% in 2015
- Cost of contracts rose by the least in Southeast Asia
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If global investors are worried by Philippine elections in May, they’re keeping it under wraps in the bond market.
The net amount of sovereign debt protected against non-payment by credit-default swaps fell 32 percent last year to $1.49 billion, Depository Trust & Clearing Corp. data show. Volumes averaged $2.6 billion during former President Gloria Arroyo’s reign until mid-2010 when Benigno Aquino took over, based on DTCC data starting in Oct. 2008. The cost of a Philippines contract providing coverage for five years rose 19 basis points in 2015, the smallest increase in Southeast Asia, as jumps of more than 70 basis points were recorded for Indonesia, Malaysia and Vietnam.