After raising over half a trillion pesos from retail treasury bonds (RTBs) last week, the Marcos administration successfully borrowed ₱50 billion from separate sales of debt securities this week.

During the sale of 10-year treasury bonds (T-bonds) on Tuesday, Aug. 19, the Bureau of the Treasury (BTr) fully awarded its ₱25-billion offering, with total bids reaching ₱98.1 billion, nearly four times the amount offered.

Demand was stronger than the ₱63.5-billion tenders during the previous 10-year bond auction on July 15.

With a remaining maturity of nine years and eight months, the bonds were awarded at an average rate of 5.997 percent.

This was lower by 2.5 basis points (bps) than the 6.022-percent rate for comparable corporate bonds in the secondary market, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rate.

It was also significantly lower by 28.8 bps than the 6.285 percent recorded in the same auction almost a month ago.

Similarly, during the sale of short-dated T-bills on Monday, Aug. 18, the BTr fully awarded its ₱25-billion offering.

Total bids reached ₱113.8 billion, nearly five times the amount offered, which was also higher than last week’s demand of ₱87.3 billion.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), the lower interest rate on Tuesday was influenced by dovish signals from the Bangko Sentral ng Pilipinas (BSP), with a quarter-point cut in the key borrowing costs possible as early as the upcoming policy meeting on Aug. 28.

Citing still subdued inflation, these dovish signals extend for the remaining rate-setting meetings this year, as a cumulative of 50 bps is seen before entering 2026.

Ricafort also explained that bids were stronger following the government's successful borrowing of ₱507.2 billion from both local and foreign lenders due to a “very strong market demand.”

Of the total, issued at a six-percent annual interest, ₱425.5 billion came in as new money or fresh funds, including the ₱210 billion awarded during the rate-setting auction on Aug. 5, according to the BTr.

Another ₱81.7 billion was raised through a bond exchange in the first four days of the offer period.

According to the BTr, the issue and settlement date of the 31st RTB issuance is scheduled on Wednesday, Aug. 20, maturing on the same date in 2030.

Ricafort noted that the next large Treasury bond (T-bond) maturity that could add to market liquidity or money supply is ₱288.7 billion on Sept. 9. He said this could again increase the demand for government debt instruments such as Treasury bills (T-bills) and T-bonds.

For the second half of the Marcos administration, a borrowing mix of 80 domestic and 20 foreign was maintained. As per the government’s projection, however, a 77:23 borrowing mix will be the trend by the end of the current administration in 2028.

The Philippines sources more debt locally, through 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.

Finance Secretary Ralph G. Recto told reporters on the sidelines of the budget briefing that a higher share of foreign debt in the country’s debt pile will not heighten the country’s exposure to forex risks.