Research Article

The Influence of ASEAN Bond Market Integration in the Philippines’ Inflationary Pressures, Credit Expansions, and its Challenges

Authors

  • Jan Co College of Commerce of Business Administration, University of Santo Tomas, Manila, Philippines
  • Hannah Lo Chiong College of Commerce of Business Administration, University of Santo Tomas, Manila, Philippines
  • Louie Uy College of Commerce of Business Administration, University of Santo Tomas, Manila, Philippines
  • RONALDO R. CABAUATAN College of Commerce of Business Administration, University of Santo Tomas, Manila, Philippines

Abstract

Bond markets have grown mature in many countries; however, the quality of financial integration varies across ASEAN economies. In the case of bond markets in the ASEAN +3, they experienced fast development; however, they are still less integrated. This study attempts to examine the ramifications of the ASEAN bond market integration and past crises to the Philippines’ inflation, credit, and growth and identify what impedes the development of the bond market for the period of 1992 to 2017. The study also aims to have a more in-depth analysis on preventing rises from happening and controlling both credit expansions and inflationary pressures. The Ordinary Least Square method (OLS) was used to examine the relationship of inflation, credit, bond market index, real interest rate, and integration to the Philippines’ growth. This led to this paper providing empirical insights that credit has a significant positive relationship with GDP growth; while, inflation has a significant negative relationship with GDP growth. However, the bond market index and integration showed insignificant negative results. This study provides possible reasons for the said conclusion and suggests ways not only to develop and grow the debt market in the Philippines but also to sustain long-run economic stability and growth to become on par with other ASEAN economies.

Article information

Journal

Journal of Economics, Finance and Accounting Studies

Volume (Issue)

4 (1)

Pages

13-36

Published

2022-01-05

How to Cite

Co, J., Lo Chiong, H., Uy, L., & CABAUATAN, R. R. (2022). The Influence of ASEAN Bond Market Integration in the Philippines’ Inflationary Pressures, Credit Expansions, and its Challenges. Journal of Economics, Finance and Accounting Studies, 4(1), 13–36. https://doi.org/10.32996/jefas.2022.4.1.2

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Keywords:

ASEAN Bond Market Integration, Inflationary pressure, Credit expansions, Long-run economic growth