Demand for short-term government securities (GS) remained strong, with domestic lenders snapping up debt paper at lower rates amid the Bangko Sentral ng Pilipinas’ (BSP) slightly dovish stance.

During the latest treasury bills (T-bills) auction on Monday, Jan. 19, the Marcos Jr. administration raised ₱37.8 billion, surpassing the planned offer of ₱27 billion. Total bids reached ₱126.7 billion—nearly five times the amount of debt paper offered.

This week’s total bids were higher than the ₱113.1 billion in tenders from the previous T-bill auction on Jan. 12.

The Bureau of the Treasury (BTr) awarded ₱12.6 billion, exceeding the ₱9-billion offering for 91-day T-bills. Total tenders reached ₱35.7 billion. The average rate was 4.723 percent, slightly higher than the 4.31 percent recorded last week.

For 182-day debt paper, the BTr raised ₱12.6 billion, also exceeding the offered amount. Bids reached ₱45.9 billion, fetching an average rate of 4.817 percent, 3.3 basis points (bps) lower than the last auction’s 4.85 percent.

Lastly, the BTr also exceeded its ₱9-billion borrowing plan through 364-day IOUs. Demand reached ₱45.1 billion, with the average rate inching down by 2.8 bps to 4.888 percent from 4.916 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 4.798 percent, 4.881 percent, and 4.943 percent, respectively.

Average rates across the board were lower than secondary market rates but remained higher than the key borrowing cost of 4.5 percent.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the decline in borrowing costs comes against the backdrop of the BSP’s relatively dovish stance on both monetary policy and banks’ reserve requirements (RRR).

Ricafort explained that these moves could lower borrowing costs, boost loan demand and investments, and support faster economic growth, aligning with the central bank’s priority of sustaining gross domestic product (GDP) recovery amid benign inflation.

For the first quarter of 2026, the government plans to borrow ₱324 billion through T-bills, which would account for 39.3 percent of total first-quarter domestic borrowing.

Meanwhile, treasury bonds (T-bonds) will make up the remaining 60.7 percent of the first-quarter program, with planned borrowings of ₱500 billion.

The Philippines borrows more locally, through T-bills and T-bonds, than from foreign sources. This strategy leverages domestic banks and creditors that are flush with cash while mitigating exposure to foreign exchange (forex) risks and volatility.