Improving market sentiment following the Philippines’ exit from the global money-laundering watchlist, coupled with expectations of monetary easing, fueled strong investor demand for the government’s short-term debt papers.

At Monday’s auction on Feb. 24, the Bureau of the Treasury (BTr) fully awarded its ₱22 billion Treasury bill offer.

Total bids reached ₱83.711 billion, which was nearly four times the amount offered. This week’s total bids jumped from the ₱56.267 billion seen in the previous T-bill auction on Feb. 17.

The government fully awarded the ₱7 billion offering for the 91-day T-bills. Total tenders reached ₱24.5 billion. The average rate was 5.329 percent, 1.1 basis points (bps) higher than the previous week’s 5.318 percent rate.

For the 182-day debt papers, the Treasury raised ₱7 billion, fully awarding the offered amount. Bids reached ₱25.9 billion. The average rate increased slightly by one bp to 5.672 percent, from 5.662 percent.

Likewise, the government borrowed the planned ₱8 billion through 364-day debt papers. Demand reached ₱33.3 billion. The average rate slightly decreased by 2.6 bps to 5.754 percent, from 5.78 percent.

Prior to Monday’s auction, the PHP Bloomberg Valuation (PHP BVAL) Reference Rates showed that the 91-, 182- and 364-day T-bills were quoted at 5.293 percent, 5.592 percent, and 5.789 percent, respectively.

Notably, all short-term government securities were higher than this official benchmark. This came despite the continued increase in short-term PHP BVAL yields from the previous week, which also increased previously.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), noted that most T-bill yields stayed below the central bank’s policy rate of 5.75 percent, except for the one-year tenor, which reached 5.754 percent despite its slight drop from the previous week.

According to Ricafort, the average interest rates for T-bills in auctions continued rising slightly for the third consecutive week after five weeks of decline, following a slight uptick in benchmark rates.

This increase came despite the BSP’s recent policy rate pause and market expectations of a possible rate cut or further easing in April. 

However, Ricafort said that sentiment remains supported by the announced bank reserve requirement cut and the Philippines’ exit from the global money-laundering watchlist. 

The Philippines favors domestic borrowing—through treasury bills and bonds—over foreign borrowing. This strategy leverages the ample liquidity of domestic banks and creditors while mitigating foreign exchange risks and volatility.