Domestic investors snapped up the government’s short-term debt papers this week, allowing the Marcos administration to raise an additional ₱25 billion at lower borrowing costs, as investors locked in yields ahead of further rate cuts.

During the latest Treasury bills (T-bills) auction on Sept. 8, the Bureau of the Treasury (BTr) fully awarded its planned fund-raising, with total bids reaching ₱156.4 billion—more than six times the amount of debt paper offered.

This week’s total bids were higher than the ₱125.5 billion in tenders from the previous T-bill auction on Sept. 1.

The government fully awarded the ₱8.5 billion offering for 91-day T-bills. Total tenders reached ₱37.2 billion. It fetched an average rate of 5.046, 12.7 basis points (bps) lower than last week’s rate of 5.173 percent.

For 182-day debt paper, the BTr raised ₱8.5 billion, fully awarding the offered amount. Bids reached ₱63.1 billion. It fetched an average rate of 5.222 percent, 10.1 bps lower than the previous week’s 5.323 percent.

Lastly, the BTr borrowed the offered ₱8 billion through 364-day debt papers. Demand reached ₱56.1 billion. Similarly, the average rate dropped by 8.1 bps to 5.376 percent from 5.457 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 5.177 percent, 5.314 percent, and 5.470 percent, respectively. All rates stood lower than last week’s reference rates.

To note, average borrowing costs across the board were all lower than the reference rates. However, they remain higher than the key borrowing rates set by the BSP in August at five percent.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), borrowing costs fell for the tenth straight week.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the continued lowering of borrowing costs was driven by the BSP’s recent quarter-point cut to five percent, which has reached its lowest in nearly three years.

According to Ricafort, the strong demand for T-bills suggests that investors are locking in returns before rates fall further, thereby helping to lower borrowing costs for the government, businesses, and consumers.

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.