The Marcos administration raised an initial ₱107.1 billion from the sale of new 10-year Treasury bonds on Wednesday, Feb. 18, as domestic lenders scrambled to lock in yields ahead of the expected interest rate cut by the central bank.

The auction for the fixed-rate notes, which mature in February 2036, drew ₱328.5 billion in total tenders, or nearly 11 times the initial ₱30 billion offer. While the strong demand mirrored previous “jumbo” issuances, the amount awarded was lower than the ₱135 billion raised in a similar exercise in 2025.

National Treasurer Sharon Almanza said the Bureau of the Treasury does not intend to match the ₱300 billion in total IOUs raised during a single period in April last year, noting that the government is focused on specific financing requirements for the current and subsequent quarters.

“I have no intention [to accept bids totaling ₱300 billion]. We have a requirement this quarter and some for the next quarter, as this will complete part of our financing for the year. So, we’re definitely not targeting ₱300 for new money,” Almanza told reporters.

However, the final haul could increase depending on the results of an integrated exchange offer, or “switch,” which allows creditors to swap holdings of five older bond series for the new benchmark to mitigate refinancing risks.

Almanza said that she expects the government to secure approximately ₱200 billion in total by the time the offer period closes on Feb. 23. The 10-year debt was awarded at an average rate of 5.893 percent, with the coupon set at 5.925 percent. That compares with a secondary market benchmark rate of 5.934 percent for similar tenors, according to Philippine Bloomberg Valuation (PHP BVAL) Reference Rates.

The borrowing costs remain significantly higher than the Bangko Sentral ng Pilipinas’ current policy rate of 4.5 percent, but Almanza said the pricing is fair given the high probability of a rate reduction in the near term.

She cited the upcoming BSP policy meeting as primary catalyst for the robust appetite, alongside ample domestic liquidity following a bond maturity earlier this week.

The issuance of 10-year notes, typically a once-a-year event, is intended to boost market liquidity and provide a reliable price-discovery mechanism for the local economy.

Beyond domestic fundraising, Almanza said the government still has roughly $2.5 billion in foreign borrowing planned for the year.

Most of that is expected to be issued in the second half, with the United States dollar remaining the preferred market for cost efficiency, though authorities continue to monitor the yen and euro markets for potential deals.