The Marcos administration fell short of its borrowing target for the second consecutive week as the Bureau of the Treasury resisted demands from investors for higher yields, which have climbed to their highest levels in three months.

The Treasury bureau awarded ₱19.2 billion of short-dated debt papers at Monday's auction, March 16, about 71 percent of the ₱27 billion it had intended to raise. While total tenders rose to ₱36.8 billion from ₱31.5 billion a week ago, the government opted to reject a portion of the bids to prevent a more aggressive spike in borrowing costs.

Interest rates for all three tenors exceeded both previous auction levels and secondary market benchmarks as markets braced for potential inflationary pressure from global energy prices.

For the 91-day T-bills, the Treasury raised ₱8.7 billion out of the ₱9 billion offering, with the average rate jumping to 4.900 percent from 4.677 percent last week.

Meanwhile, the 182-day tenor saw a more pronounced shortfall, with the government awarding only ₱5.7 billion of the ₱9 billion on offer at an average rate of 4.948 percent, up 15.3 basis points.

On the other hand, demand for the 364-day IOUs was the weakest among the tenors, resulting in an award of just ₱4.8 billion at an average rate of 5.066 percent, a 21.7 basis-point increase from the prior week.

Average rates across all tenors settled above the Philippine Bloomberg Valuation Reference Rates, which stood at 4.858 percent for the three-month, 4.852 percent for the six-month, and 5.030 percent for the one-year papers. Furthermore, these rates remain significantly higher than the 4.25 percent benchmark rate.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the surge in rates reflects concerns over global oil prices, which recently neared four-year highs.

While NYMEX crude eased to around $98 per barrel from an intraday peak of $119.48 last week, the volatility continues to stoke domestic inflation fears.

Bangko Sentral ng Pilipinas Governor Eli Remolona has recently indicated that the central bank may consider further monetary tightening if oil prices consistently breach the $100 per barrel mark, as such a trend threatens to push inflation beyond the 4 percent target ceiling.

The government maintains a heavy domestic borrowing schedule for the first quarter of 2026, with ₱324 billion slated to be raised through T-bills alone. This represents nearly 40 percent of the period's total domestic borrowing plan, with the remaining ₱500 billion to be sourced from long-dated Treasury bonds.

The Marcos administration continues to favor domestic credit markets to utilize the high liquidity within the local banking system and to insulate the national debt from foreign exchange volatility.