(Bloomberg) -- The Philippines has set it sights on inclusion into JPMorgan Chase & Co.’s local-currency emerging-market debt index in 2025 after missing the cut this year, officials said.

The country has been in discussion with the US firm for several months, with a survey of investors held mid-year and the results released last month, Philippine Treasurer Sharon Almanza said in a phone interview Tuesday. 

Authorities are now looking at several financial reforms to lure more foreign investors, with inclusion “hopefully next year,” Finance Secretary Ralph Recto told Bloomberg News.

Joining the benchmark is typically a breakout moment for emerging economies, as the move attracts fresh inflows of overseas capital into their debt markets. The news marks a setback for the Philippines after its global peso notes dropped out of the index due to illiquidity in January. 

Non-residents hold only about 4% of the country’s outstanding bills and bonds, Almanza said. That compares to around 14% in Indonesia, 20% in Malaysia and 10% in Thailand, according to the Asian Development Bank’s regional bond monitoring report. 

In an attempt to boost offshore participation and strengthen the domestic capital market, the Bureau of the Treasury is implementing a streamlined tax treaty procedure, it said this week. With the new rules, non-resident investors no longer need to submit several tax documents to the issuer to claim tax treaty benefits. 

“Right now, we are still in the onboarding stage,” Almanza said. “Because it’s still very new, we are working with our custodian banks to disseminate the information and for the investors to submit the requirements for enrollment.” 

The Philippines also recently announced steps to revive its interest-rate swaps market and allow more participants in its bond repurchase agreements — initiatives that can also boost the liquidity of debt and help develop the local capital market. 

Prior to joining the index, countries are typically placed on a watch list, and are encouraged to implement market changes to address challenges faced by investors when investing in their debt securities. 

Almanza hopes the treasury’s efforts will improve liquidity next year and raise their chances of index inclusion, adding “we don’t really have a target but we want to encourage more foreign participation.” 

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