P25B raised via T-bills despite higher rates

MANILA, Philippines – The government was still able to raise its target amount of short-dated local debts during Monday’s sale of Treasury bills despite the higher rates sought by creditors amid the uncertainties from the ongoing US trade war.

Auction results showed the Bureau of the Treasury (BTr) borrowed P25 billion, as planned.

The offering was met with strong demand, attracting total bids amounting to P74.2 billion. That was three times bigger than the original size of the issuance.

READ: T-bill rates mostly dropped, tracking dovish BSP

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said there was robust appetite for short-dated debt paper amid the uncertainties emanating from President Donald Trump’s tariff actions.

“With the tariff uncertainly still with us, risks of steepening yields remain.  In light of these events, investors flock to short-term tenors,” Ravelas said.

“Though one can observe that with expectations of further cuts by BSP (Bangko Sentral ng Pilipinas), the yield curve is steepening. Long term rates are higher than 2023 yearend levels,” he added.

The BTr said the 91-day T-bill fetched an average rate of 5.573 percent, higher than the 5.546 percent seen in the previous auction.

Creditors asked for an average yield of 5.667 percent for the 182-day debt note, more expensive than the 5.655 percent last week.

Lastly, the average rate for the 364-day T-bill stood at 5.697 percent, up from 5.688 percent before.

For this year, the Marcos administration targets to borrow P2.55 trillion from creditors at home and abroad to plug a projected budget hole amounting to P1.54 trillion, or equivalent to 5.3 percent of the country’s gross domestic product.

By sources of financing, the government will borrow P507.41 billion from foreign investors in 2025.

The remaining P2.04 trillion is targeted to be raised domestically, of which P60 billion will be via T-bills and P1.98 trillion via longer-dated Treasury bonds.