The Marcos Jr. administration successfully borrowed ₱25 billion from short-dated debt securities as domestic investors swarmed Monday’s Treasury bills (T-bills) auction despite lower lending rates.

During the latest T-bills auction on Sept. 1, the Bureau of the Treasury (BTr) fully awarded its planned fund-raising, with total bids reaching ₱125.5 billion—more than five times the amount of debt paper offered.

This week’s total bids were higher than the ₱113.8 billion in tenders from the previous T-bill auction on Aug. 26.

The government fully awarded the ₱8.5-billion offering for 91-day T-bills. Total tenders reached ₱28.3 billion. The average rate was 5.173 percent, slightly lower than the 5.195 percent in the previous week.

For 182-day debt paper, the BTr raised ₱8.5 billion, fully awarding the offered amount. Bids reached ₱47.8 billion. It fetched an average rate of 5.323 percent, lower by 7.5 basis points (bps) than last week’s 5.398 percent.

Lastly, the BTr borrowed the offered ₱8 billion through 364-day IOUs. Demand reached ₱49.4 billion. Similarly, the average rate dropped slightly by 6.5 bps to 5.457 percent from 5.522 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 5.232 percent, 5.392 percent, and 5.536 percent, respectively.

To note, the average rate across the board clocked in higher than the recently trimmed key borrowing cost of five percent. Longer-dated IOUs stood significantly higher than the benchmark.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), borrowing costs fell for the ninth-straight week. However, the drop was modest compared to the central bank’s widely expected 25-basis-point (bp) rate cut last month.

For Ricafort, the cut will ease borrowing costs for the government, businesses, and consumers, while narrowing the rate gap between the Bangko Sentral ng Pilipinas (BSP) and the United States Federal Reserve (US Fed).

The Philippines borrows more 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.

It can be recalled that the country’s debt-to-gross domestic product (GDP) ratio climbed to a 20-year high of 63.1 percent—further away from the Marcos Jr. administration’s target—as the national government’s outstanding debt continued to breach records in the second quarter of 2025.