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Manila Bulletin devider Business devider Banking & Finance devider Gov't borrowings fall short as investors pull back

Gov't borrowings fall short as investors pull back

Published Sep 23, 2025 03:14 pm

At A Glance

  • The Marcos government borrowed only ₱27 billion of its planned ₱35 billion through the sale of two government bonds, as demand was weaker for both the three-year and 20-year bonds, while borrowing costs remained high for the latter.
The Marcos government borrowed only ₱27 billion of its planned ₱35 billion through the sale of two government bonds, as demand was weaker for both the three-year and 20-year bonds, while borrowing costs remained high for the latter.
During the sale of reissued 20-year Treasury bonds (T-bonds) on Tuesday, Sept. 23, the Bureau of the Treasury (BTr) awarded only ₱16.8 billion of its ₱25 billion planned borrowing. Total bids reached ₱25.7 billion, slightly higher than the amount offered.
Demand was slightly weaker than the ₱26.4 billion tendered during the previous 20-year bond auction on May 14.
With a remaining maturity of 18 years and eight months, the bonds were awarded at an average rate of 6.421 percent.
This was 7.5 basis points (bps) higher than the 6.346 percent rate for comparable corporate bonds in the secondary market, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rate.
It was also 4.7 bps higher than the 6.374 percent recorded in the same auction in May. It remained above the central bank’s key policy rate of five percent.
Meanwhile, during the sale of the three-year T-bonds, the BTr fully awarded its ₱10-billion offering. Total bids reached ₱37.9 billion, nearly double the amount offered.
Demand was significantly weaker than the ₱93 billion tendered during the previous three-year bond auction on Aug. 27.
With a remaining maturity of two years and seven months, the bonds were awarded at an average rate of 5.605 percent.
This was 5.6 bps lower than the 5.661 percent rate for comparable corporate bonds in the secondary market, based on the PHP BVAL Service Reference Rate.
It was also 2.9 bps lower than the 5.634 percent recorded in the same auction in August.
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—moving 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.

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Bureau of the Treasury (BTr) government borrowings
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