Philippine Peso Bonds Best in EM Asia on Liquidity, Dovish Tilt

Philippine peso bonds are poised to extend their rally on interest-rate cuts, flush domestic liquidity and attractive valuations.

Philippine government bonds have outperformed all emerging Asian peers so far this year — the 10-year yields have fallen 14 basis points — and may be set to go further. Brandywine Global sees the 10-year yield falling to 5.75% by year-end. It closed around 5.93% on Wednesday. Adjusted for inflation, it stands around 4%, the highest in emerging Asia.