The Marcos administration borrowed ₱28.4 billion from domestic creditors through the sale of short-term debt on Monday, July 21—surpassing its target for the third-consecutive week.

This was despite a relatively weaker investor demand even as interest costs further dropped.

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 ₱92.2 billion in bids—nearly four times the amount offered.

This week’s demand was slightly weaker than last week’s ₱102.9 billion in bids for similar offerings.

The BTr fully awarded its ₱7-billion offer for 91-day treasury bills (T-bills). Total tenders reached ₱35.648 billion. The average rate was 5.422 percent, 5.3-basis points (bps) lower than the previous week’s 5.475 percent.

For 182-day debt securities, the BTr awarded ₱11.9 billion to domestic creditors, exceeding the ₱8.5-billion offered amount. Bids reached ₱27.1 billion, fetching an average rate of 5.566 percent, slightly lower than last week’s 5.575 percent.

Lastly, the BTr borrowed the planned ₱9.5 billion through 364-day IOUs. Demand reached ₱29.4 billion. Like the shorter bills, the average rate inched down by 1.9 bps to 5.631 percent from 5.65 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 5.451 percent, 5.571 percent, and 5.658 percent, respectively.

Rates for the six-month and one-year securities were lower than the previous week’s benchmark rates, but the three-month debt paper was a bit higher. Rates across the board were higher than the key borrowing cost of 5.25 percent.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said that the lower interest costs for the third-straight week came ahead of the large long-term debt securities from August to September, worth about ₱800 billion, that could increase market liquidity.

However, these expected issuances were offset by the upcoming retail treasury bond (RTB) issuance within the quarter, with a benchmark size of around ₱200 billion, according to the Department of Finance (DOF).

It also came amid uncertainties over United States (US) President Donald Trump’s tariff wars, a development that could slow down the global economy.

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.