Short-term government securities (GS) continued to draw strong interest as investors rushed to lock in debt at lower yields ahead of the widely expected 25-basis-point (bp) benchmark rate cut on Thursday, Feb. 19.

During the latest treasury bills (T-bills) auction on Monday, Feb. 16, the Marcos Jr. administration raised ₱37.8 billion, surpassing the planned offer of ₱27 billion.

Total bids reached ₱142.3 billion—over five times the amount of debt papers offered. This week’s total bids were lower than the ₱158.2 billion in tenders from the previous T-bill auction on Feb. 9.

The Bureau of the Treasury (BTr) awarded ₱12.6 billion, exceeding the ₱9-billion offering for 91-day T-bills. Total tenders reached ₱49.8 billion. The average rate was 4.35 percent, significantly lower than the 4.492 percent recorded last week.

For 182-day debt papers, the BTr raised ₱12.6 billion, also exceeding the offered amount of ₱9 billion. Bids reached ₱55.7 billion, fetching an average rate of 4.433 percent, which is 14.5 basis points (bps) lower than the previous auction’s 4.578 percent.

Lastly, the BTr also exceeded its ₱9-billion borrowing plan through 364-day IOUs, awarding ₱12.6 billion. Demand reached ₱36.8 billion, with the average rate falling by 10.3 bps to 4.512 percent from 4.615 percent in the previous auction.

PHP Bloomberg Valuation (PHP BVAL) Reference Rates showed that the 91-, 182-, and 364-day T-bills were quoted at 4.55 percent, 4.635 percent, and 4.678 percent, respectively.

Average rates across the board remained lower than these secondary market rates.

Notably, average rates for the 91- and 182-day tenors have now fallen below the 4.5-percent benchmark rate, while the 364-day rate remains slightly above it.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said borrowing costs dropped ahead of a widely expected 25-bp Bangko Sentral ng Pilipinas (BSP) rate cut, implying domestic creditors are locking in yields prior to the anticipated reduction in the key borrowing cost.

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.