The Marcos administration only borrowed ₱35.1 billion through long-term debt sales, falling short of its ₱40-billion target, as fiscal and debt concerns over the United States' tax plan pushed up bond rates.

At the auction on Wednesday, June 25, the Bureau of the Treasury (BTr) awarded its planned ₱20 billion three-year treasury bonds (T-bonds). Meanwhile, the government rejected some offers in the 25-year T-bonds, raising ₱15.1 billion from the planned ₱20 billion.

Tenders for the three-year bonds totaled ₱40.7 billion, more than twice the amount offered.

Demand for this week was weaker than the ₱63.9 billion tendered by government securities eligible dealers (GSEDs) during the previous three-year auction on May 14.

With a remaining term of two years and 10 months before maturity, the bond’s yield was capped at an annual rate of 5.760 percent. This was 4.3 bps lower than the 5.803-percent rate in the previous auction previously

It was also 3.2 basis points (bp) lower than the 5.792 percent rate for comparable corporate bonds in the secondary market, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rate.

Meanwhile, tenders for the 25-year bonds totaled ₱22.6 billion, a tad bit higher than the offered amount.

Demand was also weaker compared to the ₱33.8 billion in the previous auction of the same maturity two months ago on March 25.

It has a remaining life of 24 years and seven months before maturity, and was issued at an annual rate of 6.649 percent. This was 17.3 bps higher than the 6.476 percent in the March’s auction.

It was also slightly higher than the 6.629-percent rate for comparable corporate bonds in the secondary market, based on BVAL Service Reference Rate.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the weaker demand and lower yield followed US President Donald Trump's announcement of a temporary ceasefire between Iran and Israel.

Trump’s move caused global crude oil prices to plummet to their lowest in two weeks, marking a significant reversal since the onset of hostilities on June 13.

He said lower global crude oil prices and a weaker US dollar-peso exchange rate at new one-week lows are expected to alleviate recent pressures on imported prices and overall inflation.

Meanwhile, the uptick in the 25-year bond yield followed a rise in long-term US Treasury yields amid fiscal and debt concerns tied to US President Donald Trump’s tax plan, with the similar 20-year US Treasury yield also reaching a four-month high at 4.83 percent.

The Philippines borrows more locally, through the issuance of treasury bills and bonds, than from foreign sources. This borrowing strategy leverages domestic banks and creditors who are flush with cash, while mitigating exposure to foreign exchange (forex) risks and volatility.

The national government’s outstanding debt was equivalent to 62 percent of the country’s gross domestic product (GDP) in the first quarter, its highest level in two years. It climbed from 60.7 percent at the end of 2024.

Specifically, domestic debt stood at 42.3 percent of GDP, while foreign debt had a GDP ratio of 19.7 percent.