Philippine Bonds Face Extended Slump on Large Rate Hike Bets

Philippine sovereign bonds are extending a selloff as traders price in the prospect of a 50-basis-point rate hike, the largest since 2023.

The outlook for peso bonds deteriorated after data last week showed inflation accelerated at the fastest pace in three years in April. It pushed up the three-month peso swaps to as high as 5.13%, implying expectations of 50 basis point of rate increase at the next policy decision on June 18.