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Manila Bulletin devider Business devider Banking & Finance devider Marcos admin borrows full ₱30 billion despite higher costs

Marcos admin borrows full ₱30 billion despite higher costs

Published Jul 1, 2025 04:27 pm
Despite softer demand and higher costs, the Marcos administration successfully borrowed its planned ₱30 billion through the resale of long-term debt securities, following the tentative ceasefire in the Middle East and signals from the Bangko Sentral ng Pilipinas (BSP) of a potential rate cut by year-end.
The Bureau of the Treasury (BTr) awarded the full ₱30 billion in reissued five-year Treasury bonds (T-bonds). Total tenders for the bonds reached ₱57.5 billion, nearly double the amount offered. However, demand was weaker compared to the ₱59.9 billion tendered by government securities eligible dealers (GSEDs) at the previous five-year auction on June 3.
The bond's yield was capped at an annual rate of 5.896 percent, slightly higher than the 5.887 percent at the last auction. This bond has a remaining life of five years and less than a month until maturity. Despite the slight increase, the rate was 7.7 basis points (bp) lower than the 5.937 percent for comparable corporate bonds in the secondary market, according to the PHP Bloomberg Valuation (BVAL) Service Reference Rate.
On Monday, June 30, the government borrowed below its target, securing only P24 billion as it rejected offers with higher interest costs. It awarded just P7 billion of the P8 billion offering for three-month debt paper.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort attributed the slightly higher interest rate to developments in the Middle East and the BSP's recent signal of a possible quarter-point cut by year-end.
The Philippines primarily borrows from local sources through the issuance of Treasury bills and bonds, rather than foreign ones. This strategy leverages domestic banks and creditors who are flush with cash, while also mitigating exposure to foreign exchange (forex) risks and volatility.
The national government's outstanding debt reached 62 percent of the country’s gross domestic product (GDP) in the first quarter, its highest level in two years. This is an increase from 60.7 percent at the end of 2024. Specifically, domestic debt accounted for 42.3 percent of GDP, while foreign debt had a GDP ratio of 19.7 percent.

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Bureau of the Treasury (BTr) government borrowings
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