The Marcos administration has borrowed ₱28.4 billion from domestic creditors through the sale of short-term debt on Monday, July 14—surpassing its target for a second straight week as investor demand strengthened amid lower borrowing costs due to heightened tariff-led global economic uncertainty.

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 ₱102.9 billion in bids—more than four times the amount offered.

This week’s demand was higher than last week’s ₱87.5 billion in bids for similar offerings.

The BTr fully awarded its ₱7-billion offer for 91-day treasury bills (T-bills). Total tenders reached ₱38.2 billion. The average rate was 5.475 percent, 5.1-basis points (bps) lower than the previous week’s 5.526 percent.

For 182-day debt securities, the BTr awarded ₱11.9 billion to domestic creditors, exceeding the ₱8.5-billion offered amount. Bids reached ₱38.9 billion, fetching an average rate of 5.575 percent, 4.3-bps lower than last week’s 5.618 percent.

Lastly, the BTr borrowed the planned ₱9.5 billion through 364-day IOUs. Demand reached ₱25.9 billion. Like the shorter bills, the average rate inched down slightly to 5.65 percent from 5.656 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 5.431 percent, 5.642 percent, and 5.683 percent, respectively. 

Rates across the board were lower than the previous week’s benchmark rates. But they were still higher than the key borrowing cost of 5.25 percent.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the continued drop in interest rates for the second consecutive week comes amid “uncertainties over United States (US) President Donald Trump’s tariffs and trade wars”—a development that “could slow down the global economy.” It can be recalled that Trump hiked the tariffs for the Philippine exports to 20 percent from 17 percent previously.

Ricafort noted that the Bangko Sentral ng Pilipinas (BSP) could possibly cut rates further “as early as Aug. 28,” matching the potential US Federal Reserve’s cuts by year-end.

The Philippines primarily borrows from local sources through the issuance of T-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.