Last week, Asia credit markets traded defensively as higher rates, elevated oil prices, and persistent macroeconomic uncertainty weighed on investor sentiment. Risk appetite remained subdued, resulting in broad-based spread widening across both corporate and sovereign credit sectors.
Within Asia investment-grade (IG) corporates, spreads widened by approximately 6-12 basis points (bps) week-on-week (WoW), with longer-duration and lower-tier IG issuers underperforming. Despite the weaker tone, front-end, higher-quality credits remained relatively supported as some investors selectively added exposure at more attractive all-in yields.
In the sovereign space, selling pressure intensified as investors reduced risk exposure amid ongoing market volatility. Philippine sovereign bonds (ROPs) saw spreads widen by 13-29 bps WoW, while Indonesian sovereign bonds widened by 6-19 bps WoW, with longer-dated maturities bearing the brunt of the move. Limited bottom-fishing emerged toward the latter part of the week but was insufficient to offset the broader risk-off environment.
For Philippine corporate issuers, cash prices were broadly unchanged to 0.375 points lower WoW. Trading activity remained concentrated in select bank and utility names, while overall retail demand stayed soft as investors remained cautious about deploying fresh capital.
Looking ahead, investors may remain focused on inflation data, oil price developments, and evolving geopolitical risks, all of which could influence rates and the direction of credit markets. Given the current backdrop, a selective approach may be appropriate, with a preference for high-quality credits in the 1- to 5-year segment, where carry remains attractive and spread volatility is relatively more manageable.
Note: Rates are indicative (as of October 6, 2026) and subject to refresh.
Note: Note: Rates are indicative (as of October 6, 2026) and subject to refresh
For more information on foreign currency denominated bonds, you may reach out to your Wealth Specialist or log in to Metrobank Wealth Manager.
DANA LOUISE GERONIMO is an Investment Counselor at Metrobank under the Markets Advisory Division. She built her expertise through her previous roles as an Investment Specialist and as a Financial Markets Sector Management Trainee within the bank. Dana holds a Master’s degree in Industrial Economics from the University of Asia and the Pacific. Outside of work, she enjoys exploring different fitness centers and reading.
