THE GOVERNMENT made a full award of the reissued Treasury bonds (T-bonds) it offered on Tuesday at lower rates as high liquidity drove demand and with players betting on the Bangko Sentral ng Pilipinas’ (BSP) next move.
The Bureau of the Treasury (BTr) borrowed P30 billion as planned via the reissued seven-year bonds, with total bids reaching P95.765 billion or more than triple the amount on offer.
This brought the outstanding volume for the bond series to P125 billion, the Treasury said in a statement.
To accommodate the strong demand seen for the offering, the BTr opened its tap facility window to raise an additional P10 billion via the bonds.
The reissued bonds, which have a remaining life of five years and four days, were awarded at an average rate of 5.71%. Accepted yields ranged from 5.675% to 5.725%.
The average rate of the reissued papers fell by 58.9 basis points (bps) from the 6.299% fetched for the series’ last award on April 2, 2024 and was likewise down by 41.5 bps from the 6.125% coupon for the issue.
This was also 6.5 bps below the 5.775% fetched for the same bond series and 2 bps lower than the 5.73% quoted for the five-year debt — the benchmark tenor closest to the remaining life of the issue — at the secondary market before Tuesday’s auction, based on the PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.
The government fully awarded the T-bonds as the average yield fetched was at the lower end of market expectations amid robust appetite for the offering, the first trader said in a text message.
The auction saw strong demand “as the market is very liquid,” the second trader said in a phone interview. “The average rate was in line with secondary market yields.”
The reissued bonds fetched an average yield lower than comparable secondary market rates as the market continued to digest the latest policy hints from the BSP chief, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Last week, BSP Governor Eli M. Remolona, Jr. said a cut remains on the table at the Monetary Board’s Feb. 19 meeting, even as he noted that the policy rate of 4.5% is already “very close” to where they want it to be, signaling an imminent end to their easing cycle.
“There’s a chance that we may cut some more, and there’s also a chance that we may not move at all. But there’s not a lot of probability that we will raise in 2026,” he said.
The Monetary Board has lowered benchmark borrowing costs by a total of 200 bps since its rate cut cycle began in August 2024.
Meanwhile, analysts have said that the central bank could still ease further to help support domestic demand as prospects have weakened due to a wide-ranging corruption scandal that has stalled both public and private investments, dragging economic expansion. Philippine gross domestic product (GDP) growth slumped to a n over four-year low of 4% in the third quarter of 2025, bringing the nine-month average to 5%.
Mr. Remolona earlier said GDP growth likely averaged 4.6% last year, well below the government’s 5.5%-6.5% full-year goal, which economic managers have already said could be difficult to reach.
The BTr is looking to raise P180 billion from the domestic market this month, or P110 billion via Treasury bills and P70 billion through T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.647 trillion or 5.3% of gross domestic product this year. — Aaron Michael C. Sy
