The government exceeded its short-term borrowing target on Monday, April 13, as investors swarmed the primary market, driving down yields across all maturities and ending a month-long streak of underwhelming auctions.

The Bureau of the Treasury raised ₱32.1 billion in three-month, six-month, and one-year Treasury bills, surpassing its ₱30 billion programmed offering.

Demand for the debt papers was robust, with total tenders reaching ₱99.4 billion—more than triple the amount on offer and nearly double the ₱50.2 billion in bids recorded a week earlier. This was also a turnaround for the Marcos administration, which had struggled to meet its full borrowing goals in each of the previous four weeks amid market volatility.

Lower borrowing costs fueled the surge in appetite. The Treasury awarded ₱16.8 billion of the 91-day T-bills, more than the ₱12 billion initially planned, as bids for the tenor reached ₱50.8 billion. The average rate for the three-month paper dropped to 4.750 percent from 4.985 percent in the prior auction.

For the 182-day debt, the government raised ₱10.7 billion against a ₱9 billion offer, with the average yield sliding 19.8 basis points to 4.882 percent.

While the Treasury capitalized on the high liquidity for shorter tenors, it remained selective with the one-year paper. The bureau accepted only ₱4.6 billion of the ₱9 billion planned for the 364-day IOU, even as demand reached ₱13.9 billion. The average rate for the one-year bill eased to 5.168 percent from 5.204 percent.

The auction rates for the 91-day and 182-day tenors settled below their respective PHP Bloomberg Valuation Service (BVAL) reference rates, which stood at 4.760 percent and 4.914 percent on Monday. However, the 364-day rate remained slightly higher than its 5.159 percent BVAL counterpart.

Despite the decline, yields remain significantly above the Bangko Sentral ng Pilipinas’ current 4.25 percent benchmark policy rate.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the shift in market sentiment to a cooling of geopolitical tensions. He noted that yields responded to a two-week ceasefire in the Middle East, which provided a reprieve from the inflationary pressures that had spooked bond markets a month ago.

The Treasury is ramping up its domestic fund-raising efforts for the second quarter of 2026. The government plans to borrow ₱364 billion via T-bills during the period, a 12.3 percent increase from the ₱324 billion targeted in the first quarter. These short-term instruments will represent 46.4 percent of the ₱784 billion total domestic debt program for the quarter.

Meanwhile, the government has scaled back its long-term borrowing plans, with Treasury bond offerings set at ₱420 billion, down 16 percent from the previous quarter’s ₱500 billion. The total domestic borrowing plan for the second quarter accounts for nearly 30 percent of the government’s ₱2.68 trillion annual financing requirement.