Demand for the government’s short-dated treasury bills (T-bills) continued to decline, but the Marcos Jr. administration on Monday, Oct. 6, was still able to borrow ₱22 billion at slightly higher borrowing costs.

During the latest T-bills auction, the Bureau of the Treasury (BTr) fully awarded its planned fundraising, with total bids reaching ₱74.5 billion—more than three times the amount of debt paper offered.

This week’s total bids were lower than the ₱80.5 billion in tenders from the previous T-bill auction on Sept. 29.

The government fully awarded the ₱7.5-billion offering for the benchmark 91-day T-bills, with tenders reaching ₱19.9 billion. The average rate was 4.983 percent, 15.5-basis points (bps) higher than the 4.828 percent in the previous week.

For the 182-day debt paper, the BTr raised ₱7.5 billion, fully awarding the offered amount. Bids reached ₱30.1 billion. It fetched an average rate of 5.128 percent, 5.3-bps higher than last week’s 5.075 percent.

Lastly, the BTr borrowed the ₱7 billion it offered through 364-day IOUs. Demand reached ₱24.5 billion. Its average rate increased by 5.7 bps to 5.228 percent from 5.171 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 4.915 percent, 5.177 percent, and 5.326 percent, respectively.

Only the three-month bills were lower than the previous reference rate, while the six-month and one-year bills were higher.

To note, the average rate for the three-month bills was the only rate that clocked in lower than the key borrowing cost set by the Bangko Sentral ng Pilipinas (BSP), at five percent. Meanwhile, longer-dated IOUs stood higher than the benchmark.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), recent BSP interest rate reductions and expectations of further easing have prompted lenders to lock-in yields before they drop further.

The policy-setting Monetary Board (MB) of the BSP is scheduled to meet on Thursday, Oct. 9, to update its policy stance. It has so far reduced key lending rates by 150 bps since its easing cycle began in August last year.

The Marcos Jr. government’s planned domestic borrowings for the final quarter of the year stood at ₱437 billion, a drop of ₱253 billion from ₱690 billion in the third quarter. This marks the lowest quarterly financing from local creditors in 2025.

From October to December, the government intends to borrow ₱262 billion in T-bills, 19.4-percent lower than the amount it planned to borrow in the third quarter. T-bills will comprise 60 percent of the total fourth-quarter debt offerings.

To recall, the current administration’s gross borrowings declined slightly to ₱1.757 trillion in the first seven months of the year, driven by a drop in domestic loans despite a more than 50-percent increase in foreign debt.