Domestic creditors flocked to the government’s long-dated securities amid expectations of further cuts in key borrowing costs, seeking to lock in still-higher yields ahead of the widely expected easing.

During the sale of treasury bonds (T-bonds) on Tuesday, Feb. 10, the Bureau of the Treasury (BTr) fully awarded its planned amount of ₱30 billion.

Total bids reached ₱80.3 billion, nearly three times the amount offered. Demand was significantly higher than the ₱41.5 billion tendered during the previous seven-year T-bond auction on Jan. 20.

Maturing in seven years and six months, the bonds were awarded at an average rate of 5.859 percent. This was 5.5 basis points (bps) higher than the 5.804 percent seven-year secondary market rate, based on PHP Bloomberg Valuation (BVAL) Service Reference Rate.

Meanwhile, the awarded rate stood 7.5 bps lower than the 5.934 percent recorded during the Jan. 20 auction but remained above the 4.5-percent policy rate set by the Bangko Sentral ng Pilipinas (BSP).

Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort said domestic creditors flocked to long-dated debt papers because of the BSP’s “dovish” signals in recent weeks, heightening market expectations of another quarter-point cut at the upcoming Feb. 19 monetary policy meeting.

Ricafort further noted that the surge in demand implies that investors are keen to lock in yields ahead of a possible BSP easing.

For the first quarter of 2026, the government plans to borrow ₱324 billion through treasury bills (T-bills), accounting for 39.3 percent of total first-quarter domestic borrowing. T-bonds will make up the remaining 60.7 percent, with planned borrowings of ₱500 billion.

The Philippines relies more on local borrowing through T-bills and T-bonds than on foreign sources. This strategy leverages domestic banks and creditors that are flush with cash while reducing exposure to foreign exchange risks and volatility.