Gov’t bonds lured foreign funds in 2025 as PH stocks lagged

Here is a rewritten version of the blog post, polished and professional in tone

Philippines Attracts Foreign Funds Gov't Bonds Outshine Stocks in 2025

Despite a turbulent year, the Philippines still managed to attract significant foreign investment in 2025. According to data from the Bangko Sentral ng Pilipinas (BSP), net inflows from foreign portfolio investments (FPI) surpassed outflows by nearly $4 billion in the first 11 months of last year, marking a 54% increase from the same period in 2024. In November alone, net inflow reached $342 million, more than three and a half times the amount recorded during the same month in the previous year.

It is clear that government bonds have emerged as the preferred investment option for foreign investors seeking returns in the Philippine market. But what are the factors driving this trend? Why are government bonds outshining stocks?

One key factor contributing to the allure of government bonds is their relatively low risk profile. Investors seeking stable returns often opt for fixed-income investments like government bonds, which offer predictable interest payments and principal repayment at maturity. In contrast, Philippine stocks have historically been more volatile, making them less attractive to risk-averse investors.

Another reason why government bonds are attracting foreign funds is their attractive yields. With the BSP's monetary policy aimed at keeping inflation in check, interest rates remain relatively high, making government bonds a more appealing investment option compared to other fixed-income instruments with lower yields.

Furthermore, the Philippine economy has been showing signs of resilience, which may have contributed to the increased demand for government bonds. The country's GDP growth rate has remained steady, driven by a strong services sector and robust consumption. This economic stability is likely to have given investors confidence in the Philippine market, leading them to seek out higher-yielding investments like government bonds.

In conclusion, the Philippines' government bonds have emerged as the star attraction for foreign funds in 2025, offering investors a relatively low-risk option with decent returns. While stocks continue to lag behind, it's clear that government bonds will remain a key player in the Philippine market, providing investors with a stable and attractive investment option.

Key Takeaways

Government bonds have attracted significant foreign investment in 2025, with net inflows beating outflows by nearly $4 billion.
Low risk profile and attractive yields make government bonds an appealing investment option for risk-averse investors.
Philippine economy's resilience has contributed to increased demand for government bonds.

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Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.