Philippines Sov Debt Curve Bull-Flattens, Central Bank To Cut RRR

The Philippines USD sovereign debt curve has bull-flattened post FOMC, with yields 2-6bps lower. Earlier Philippines NEDA Secretary mentioned the GDP growth target will be reviewed on Friday, while the Central Bank will look to lower RRR to decrease borrowing costs.

• Curves have bull-flatten post FOMC with yields 2-6bps lower. The 2Y yield is 3bps lower at 4.82%, 5Y yield is 3.5bp lower at 4.99%, the 10Y yield is 6bp lower at 5.01%, while 5yr CDS is 1.5bp lower at 58.5bps.
• The PHILIP to UST spread difference has significantly tighten over the past week especially in the 2-5yr part of the curve, however we have given back some of those moves over the past two days, while the longer end now out-performs UST curves, 2y is 21bps (3bps), the 5yr is 73bps (+2bp), while the 10yr is 76bps (-2.5bps)
• Cross-asset moves: the USD/PHP is 0.75% lower, PSEi Index is up 0.60%, Corporate Credit curve is 1-3bps higher over the past week, while US Tsys yields are 1-3bps lower.
• Philippines' NEDA Secretary Balisacan announced at a briefing that the country's GDP growth target will be reviewed on Friday, highlighting the continued impact of high rates on demand and investment, while also suggesting that March inflation is unlikely to surpass that of February.
• The Philippine central bank plans to lower lenders' reserve requirement ratio to decrease borrowing costs, with Governor Eli Remolona stating that while monetary policy remains hawkish, the ratio won't be cut immediately. Remolona emphasized that the country doesn't necessarily need to wait for the Federal Reserve to ease its policies before adjusting its own key rate, suggesting that significant market fluctuations might prompt a more decisive response.
• Looking Ahead: Calendar is light for the remainder of the week.