Philippines implements non-restricted trade in PHP bonds

MANILA - The Philippines Bureau of Treasury has implemented a non-restricted trading and settlement environment (NRT) for Peso-denominated coupon-bearing Government securities effective May 4.

Previously, Tax-Exempt Institutions (TEIs), comprised of pension funds, State insurance companies and State banks, only traded with other TEIs because regulations did not easily allow tax-exempt institutions to trade with taxable institutions (such as commercial banks).
ANZ Bank, in a research note, says that this was clearly an impediment for secondary market trading because TEIs owned around 23% of the Philippines Government bond market.
ANZ says that the first day of the non-restricted trading and settlement environment (NRT) saw TEIs as small net buyers in the market, contrary to initial market expectations.
“(However), we suspect that this is because PHP yields had been creeping higher over the past few months on anticipation of this NRT implementation. (And) the Bureau of Treasury rejected two of the last four bonds auctions, leaving bond supply very light.” www.live.anz.com (ATI).