Following the maturity of nearly ₱290 billion in government bonds, the Marcos Jr. administration secured ₱30 billion from its latest debt sale at lower borrowing costs, as reinvestment demand boosted appetite for securities and pulled yields down at the auction.

During the sale of reissued seven-year treasury bonds (T-bonds) on Tuesday, Sept. 9, the Bureau of the Treasury (BTr) fully awarded its ₱30-billion offering, with total bids reaching ₱79.7 billion, nearly three times the amount offered.

Demand was also stronger than the ₱57.5 billion tendered during the previous five-year bond auction on July 1.

With a remaining maturity of four years and 10 months, the bonds were awarded at an average rate of 5.772 percent.

This was lower by 4.2 basis points (bps) than the 5.814-percent rate for comparable corporate bonds in the secondary market, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rate.

It was also lower by 12.4 bps than the 5.896 percent recorded in the same auction in July.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), the lower borrowing cost on Tuesday marked one of the lowest levels in nearly a year.

This comes as investors reinvested proceeds from the ₱288.7 billion in bonds that matured on the same day, boosting demand for government securities (GS). This surge in reinvestment demand helped pull down yields at the auction.

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.