T-bond rates up ahead of jumbo debts maturities
The national government was able to borrow its target amount of long-dated local debts during Tuesday’s sale of Treasury bonds (T-bonds). This was despite creditors seeking higher rates as the state tries to raise cash as fast as it can ahead of massive maturities in the next months.
Auction results showed the Bureau of the Treasury borrowed P20 billion from domestic creditors via re-issued T-bonds, which have a remaining life of 18 years and 10 months.
The offering was almost twice oversubscribed, with total demand hitting P39.5 billion.
The BTr said the T-bonds fetched an average rate of 6.584 percent, higher than the 6.486 percent recorded in the last offering of the 20-year debt note on May 14, 2025.
It was also more expensive than the 6.568 percent quoted for the comparable tenor in the secondary market as of July 28.
“The average 20-year Treasury bond yield is slightly higher ahead of the retail Treasury bond (RTB) offering as early as August 2025 that could increase the supply of T-bonds in the market,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said.
Ricafort said an increase in liquidity would be “positively offset by the jumbo maturing five-year RTB worth P516 billion on Aug. 12, 2025, and the P288-billion T-bonds due on Sept. 9, 2025.”
This year, the Marcos administration plans to borrow P2.6 trillion from local and foreign sources to plug a budget gap amounting to P1.6 trillion, or 5.5 percent of gross domestic product.
The BTr said it would continue to favor onshore sources of debt to mitigate any foreign exchange risks from foreign borrowings.
