The national government fell short of its borrowing target on Monday, March 9, as the Bureau of the Treasury (BTr) capped its award of short-dated debt papers, facing surge in interest rates driven by escalating global oil prices and a weakening currency.

During the latest Treasury bills (T-bills) auction on Monday, March 9, the Marcos administration raised ₱19.2 billion, falling short of the planned ₱27 billion offer.

Total bids reached ₱31.5 billion, roughly 1.2 times the amount of debt papers offered. This week’s total bids were significantly lower than the ₱76.6 billion in tenders recorded during the previous T-bill auction on March 2.

The BTr awarded only ₱8.2 billion of the ₱9-billion offering for 91-day T-bills. Total tenders for this tenor reached ₱13.7 billion. The average rate rose to 4.677 percent, up from 4.311 percent last week.

For 182-day debt papers, the BTr raised ₱6.3 billion, which was also below the ₱9-billion offered amount. Bids reached ₱10.9 billion, with an average rate of 4.795 percent, 37.8 basis points (bps) higher than the previous auction’s 4.417 percent.

Lastly, the BTr awarded ₱4.75 billion of its ₱9-billion borrowing plan through a 364-day IOU. Demand for this tenor reached ₱6.9 billion, with the average rate increasing by 28.5 bps to 4.849 percent from 4.564 percent in the previous auction.

PHP Bloomberg Valuation (PHP BVAL) Reference Rates for March 9 showed that the 91-, 182-, and 364-day T-bills were quoted at 4.537 percent, 4.588 percent, and 4.666 percent, respectively.

Average rates across the board at the auction remained higher than these secondary market rates.

Notably, average rates for all tenors were significantly higher than the 4.25 percent benchmark rate.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the spike in yields comes on the back of a surge in global crude oil prices, which rose to their highest levels in nearly four years amid the ongoing war with Iran that began in February.

Ricafort also attributed the lower demand to the heightened possibility of an interest rate hike to maintain price stability amid the successive plunges of the peso against the United States (US) dollar.

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, long-dated 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 risks and volatility.