T-bond yields ease

MANILA, Philippines – The Philippine government’s bond auction on Tuesday delivered uneven results as shorter-dated debt drew strong demand while appetite for longer maturities lagged, despite lower yields.

The Bureau of the Treasury raised P10 billion from reissued notes with two years and seven months left to maturity, against total bids of P37.9 billion, or 3.8 times the offer size.

READ: T-bond rates down on liquidity boost

The strong interest pulled the average yield down to 5.605 percent, below the rate set at the previous auction.

By contrast, an offering of nearly 19-year bonds saw weaker demand. The Treasury borrowed only P16.8 billion of the P25 billion it initially sought, with bids amounting to P25.7 billion.

The longer-dated notes cleared at an average rate of 6.421 percent, also lower than the prior sale, though participation was relatively soft.

Fresh liquidity

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said demand for debt was buoyed by fresh liquidity from the settlement of maturing bonds.

“Treasury bond average auction yields eased after the large maturity last Sept. 9, 2025 worth P288.659 billion that could have increased the demand for government securities,” Ricafort said.

This year, the government plans to borrow P2.6 trillion from lenders to plug a projected budget deficit of P1.6 trillion, equivalent to 5.5 percent of gross domestic product. The drive is expected to push the debt stock to P17.36 trillion by year’s end.

Fiscal planners say they will continue to favor onshore borrowing to limit exposure to foreign exchange risks. The Marcos administration has also made clear it is seeking an upgrade to an A-level credit rating, a distinction it hopes to achieve by keeping debt metrics in check while sustaining economic growth.