Demand for government securities (GS) continued to attract investors during the latest treasury bills (T-bills) auction, allowing the Marcos Jr. administration to exceed its planned ₱33 billion in short-term debt papers, as borrowing costs across all tenors declined further, partly due to the two-week ceasefire in the Middle East.

During the auction on Monday, April 20, the Bureau of the Treasury (BTr) raised ₱40.7 billion, surpassing its ₱33-billion target. This sustained the positive momentum seen last April 13, as the government continued to borrow beyond its programmed amounts.

Total bids reached ₱127.3 billion, nearly four times the amount of T-bills offered. This marked a significant increase in demand from the ₱99.4 billion in tenders recorded in the previous auction.

The BTr awarded ₱16.8 billion for the benchmark 91-day IOUs, exceeding the ₱12-billion offering. Total tenders for this tenor reached ₱60.4 billion, while the average rate fell to 4.542 percent, down 20.8 basis points (bps) from 4.75 percent last week.

For 182-day debt papers, the BTr also raised ₱16.8 billion, surpassing the also ₱12 billion on offer. Bids reached ₱44.2 billion, with the average rate declining to 4.649 percent, or 23.3 bps lower than last week’s 4.882 percent.

The BTr partially awarded 364-day T-bills at ₱7.1 billion, below its ₱9-billion plan, even as demand for the tenor reached ₱22.7 billion. The average rate for the one-year tenor eased to 5.052 percent from 5.168 percent in the previous auction.

PHP Bloomberg Valuation (PHP BVAL) Reference Rates as of April 20 showed that 91-, 182-, and 364-day T-bills were quoted at 4.618 percent, 4.708 percent, and 5.097 percent, respectively.

Average auction rates for all three tenors remained lower than these secondary market benchmarks.

Despite the easing in borrowing costs, rates across the board remained elevated relative to the 4.25-percent benchmark rate set by the Bangko Sentral ng Pilipinas (BSP).

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the decline in borrowing costs was partly driven by lower oil prices and the two-week ceasefire between the United States (US) and Iran.

The government is ramping up its domestic fund-raising program for the second quarter of 2026, planning to borrow ₱364 billion via T-bills, up 12.3 percent from the ₱324 billion targeted in the first quarter. These instruments will account for 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 (T-bond) offerings set at ₱420 billion, down 16 percent from the previous quarter’s ₱500 billion. The total domestic borrowing program for the second quarter accounts for nearly 30 percent of the government’s ₱2.68-trillion annual financing requirement for 2026.