The Marcos administration successfully borrowed above its target of ₱22 billion in the sale of short-dated Treasury bills (T-bills) on Monday, Nov. 24, despite slightly elevated borrowing costs.

The Bureau of the Treasury (BTr) saw total bids reach ₱84.9 billion, nearly four times the planned ₱22 billion offering, exceeding its fundraising goal at the latest T-bill auction. This week’s tenders were slightly higher than the ₱84 billion recorded at the previous T-bill auction on Nov. 17.

The government fully awarded the ₱7 billion offering for 91-day T-bills. Total tenders reached ₱28.3 billion, with the average rate settling at 4.849 percent, marginally higher than the 4.842 percent recorded a week earlier.

For 182-day debt papers, the BTr also raised the full offered amount of ₱7.5 billion. Bids totaled ₱29.6 billion, fetching an average rate of 5.003 percent, up 3.3 basis points (bps) from last week's 4.970 percent.

Lastly, the BTr borrowed the entire offered ₱7.5 billion through the 364-day IOU. Demand reached ₱27 billion, while the average rate slightly dipped to 5.003 percent from 5.017 percent in the previous auction.

Prior to Monday’s auction, PHP Bloomberg Valuation (PHP BVAL) Reference Rates showed the 91-, 182-, and 364-day T-bills were quoted at 4.868 percent, 5.003 percent, and 5.085 percent, respectively. Average rates across all tenors remained above the Bangko Sentral ng Pilipinas (BSP) key borrowing cost of 4.75 percent.

Rizal Commercial Banking Corp. Chief Economist Michael Ricafort noted the mixed T-bill yields come as the stock market recently recovered to near one-month highs.

Ricafort explained that stock market improvements can lead some investors to shift funds away from safe assets like government securities, thereby reducing demand for T-bills.

He expects the recent lackluster third-quarter gross domestic product (GDP) growth of four percent and still-subdued inflation to support further easing in the key policy rate from the current 4.75 percent.

A lower policy rate typically pressures T-bill yields downward but can boost demand for the papers as investors seek to lock in returns before yields fall further, potentially leading to successful or above-target auctions.

For the current quarter, the government plans to borrow ₱262 billion in T-bills, which will constitute 60 percent of its total fourth-quarter debt offerings. Treasury bonds (T-bonds) will account for the remaining 40 percent, with planned borrowings of ₱175 billion. This T-bond target is 52.1 percent lower than the third quarter’s ₱365 billion, continuing a decline seen in the previous quarter.

The last quarter's planned domestic borrowings represent 17.1 percent of the government's total planned borrowing of ₱2.55 trillion for 2025. The Philippines’ borrowing strategy favors local debt, leveraging domestic cash and mitigating exposure to foreign exchange (forex) risks and volatility.