Colombia’s push for peace, reforms and an economic life beyond oil, combined with the peso’s renewed signs of vitality in the currency market, has shored up foreign demand of its peso-denominated debt notes, known as TESs, over the past two years. Almost untouched by investors outside the country only a few years ago, foreign holdings of Colombian bonds spiked up to more than one-quarter of total outstanding TES notes, as shown by the latest figures from the country's finance ministry.
US-based asset management powerhouse Franklin Templeton led the charge, accounting for half of the foreign demand for TES bonds in 2016. If growing inflows of portfolio investment helped the government support ongoing fiscal and current account adjustments, they also increased the pressure on the Colombian authorities to deliver on key issues such as fiscal discipline and a promised peace dividend following congressional approval of the historic peace deal with leftist rebel group Farc in December 2016.