Interest rate swap market to take off in 2025

The Philippine Interest Rate Swap (IRS) market is expected to pick up significant traction by the first quarter of 2025 as clients and banks increasingly explore its potential for dynamic benchmarking and financial interactivity.

- By KEISHA TA-ASAN

Paul Favila, country officer at Citi Philippines and chairman of the Bankers Association of the Philippines (BAP) Open Market Committee, said that the PESO IRS market would gain traction in the first quarter next year after it went live last month.

"What's important is for clients to ask what this is all about," he told reporters. "The goal is really for clients to ask the banks, 'price me based on the IRS,' because we want a benchmark that is hopefully more dynamic."

The IRS market is also expected to enhance transparency in the Philippine financial sector, allowing for a clearer understanding of cost components such as funding expenses or credit risks.