The national government successfully raised ₱57 billion from its latest auctions of short- and long-term debt, even as borrowing costs climbed to track surge in global crude prices and escalating geopolitical instability.

While the Bureau of the Treasury met its fundraising targets, the auctions signaled a cooling of demand as investors sought higher premiums to compensate for inflationary risks stemming from the Middle East.

The Treasury awarded the full ₱27 billion on offer during its Monday auction of Treasury bills, despite a noticeable dip in total tenders. Bids reached ₱76.6 billion, roughly 2.8 times the amount offered, but fell short of the ₱96.9 billion in demand seen during the Feb. 23 sale. This tightening of liquidity reflects a shift in sentiment as the market recalibrates for a potentially longer period of elevated interest rates.

Yields on the 91-day T-bills rose to an average of 4.311 percent from 4.240 percent a week prior. The 182-day papers followed suit, climbing six basis points to 4.417 percent, while the 364-day IOUs saw the sharpest increase among the short-term tenors, rising 6.3 basis points to average 4.564 percent.

Despite the uptick, these rates remained slightly below the PHP Bloomberg Valuation Reference Rates, which quoted the 91-day and 364-day tenors at 4.431 percent and 4.621 percent, respectively.

Concerns over energy security dominated the narrative, with Rizal Commercial Banking Corp. Chief Economist Michael Ricafort noting that global crude oil prices hitting eight-month highs have fueled fears of a domestic inflation resurgence.

Market participants are increasingly wary that supply chain disruptions could force the Bangko Sentral ng Pilipinas to maintain its 4.25 percent benchmark rate for longer than initially anticipated.

The cautious tone extended into Tuesday’s auction of five-year Treasury bonds, where the government raised the planned ₱30 billion. Demand for the long-term debt was notably thinner, with total bids of ₱47.8 billion—a steep drop from the ₱164.8 billion recorded in the February auction.

The bonds, maturing in January 2031, fetched an average rate of 5.717 percent. This was 10.1 basis points higher than the 5.616 percent secondary market rate and 16 basis points above last month’s result.

For the first quarter of 2026, the administration is leaning heavily on the domestic market to fund its ₱824 billion borrowing program. The strategy, which earmarks ₱324 billion for T-bills and ₱500 billion for T-bonds, aims to leverage the ample liquidity within the local banking system while insulating the national balance sheet from volatile foreign exchange fluctuations.