The Marcos administration raised ₱28.4 billion from domestic investors in Monday’s sale of short-term debt, surpassing its target as demand remained firm, with investors attracted to the higher yields of Treasury bills (T-bills) compared to shorter offerings from the central bank.

During the sale of three-month, six-month, and one-year debt securities, the Bureau of the Treasury (BTr) awarded beyond its ₱25-billion program after receiving a total of ₱87.5 billion in bids—more than three times the amount offered.

The BTr fully awarded its ₱7-billion offer for 91-day Treasury bills (T-bills). Total tenders reached ₱30.5 billion. The average rate was 5.526 percent, unchanged from the previous week’s rate.

For 182-day debt securities, the BTr awarded ₱11.9 billion to domestic creditors, exceeding the ₱8.5-billion offered amount. Bids reached ₱33.7 billion, fetching an average rate of 5.618 percent, slightly higher than last week’s 5.607 percent.

Lastly, the BTr borrowed the planned ₱9.5 billion through 364-day IOUs. Demand reached ₱23.3 billion. The average rate slightly inched up to 5.656 percent from 5.651 percent in the previous auction.

Prior to Monday’s auction, PHP Bloomberg Valuation (PHP BVAL) Reference Rates showed that the 91-, 182-, and 364-day T-bills were quoted at 5.471 percent, 5.662 percent, and 5.7 percent, respectively.

Average rates across the board were higher than the latest key borrowing cost of 5.25 percent.

According to a trader, demand for short-term debt securities remains steady “as it offers higher yield compared to the shorter BSP [Bangko Sentral ng Pilipinas] facilities, at least especially to those who have access to both products.”

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the strong investor interest suggests that domestic investors are eager to lock in current yields ahead of possible BSP rate cuts in the coming months.

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.