Below-target borrowings could persist due to war-shocked yields, a strategy the Marcos Jr. administration appears to have applied as it enters the second quarter of 2026, with planned domestic borrowings dropping from ₱824 billion in the first quarter to ₱784 billion.

In a March 23 memorandum to government securities eligible dealers (GSEDs), signed by National Treasurer Sharon Almanza, the Bureau of the Treasury’s (BTr) borrowing plan for the upcoming quarter showed a decrease of ₱40 billion, or 4.9 percent, from the first quarter’s planned borrowings.

From April to June, the government intends to borrow ₱364 billion in treasury bills (T-bills), which is 12.3 percent higher than the ₱324 billion it planned to borrow in the first quarter of 2026. T-bills will comprise 46.4 percent of the total second-quarter domestic debt offerings.

Meanwhile, treasury bonds (T-bonds), or long-term government debt, will account for the remaining 53.6 percent, with planned borrowings of ₱420 billion. This is ₱80 billion lower than the first quarter’s ₱500 billion, representing a 16-percent drop.

Planned domestic borrowings for the second quarter represent 29.3 percent of the government’s total planned borrowing in 2026 of ₱2.68 trillion.

This year’s borrowing mix will be 77:23, meaning 77 percent of debt will be sourced domestically, while 23 percent will come from external sources. This marks a shift from last year’s 81:19 borrowing mix.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the lower borrowing plan for the second quarter reflects the government’s improving fiscal management and the country’s healthier cash buffers.

This places the government in a position that spares it from the pressure to borrow even at expensive rates.

Note that the BTr has been having a hard time borrowing recently, as investors have been demanding higher rates for the government’s debt sales, forcing the government to reduce or even reject bids.

“Demand will likely stay selective, with investors still pushing for higher yields amid global uncertainty, so we may continue to see partial awards,” Ravelas said.

“That’s not a problem—what’s important is that the BTr remains flexible and prioritizes cost over volume rather than locking in expensive debt,” he asserted.