Philippine Treasury raises P30 billion despite higher yields

The Philippine government successfully sold Treasury bonds (T-bonds) on Tuesday, March 18, 2025. This sale came despite rising interest rates influenced by a global selloff in German bonds. The Bureau of the Treasury aimed to borrow P30 billion and was able to meet this target. The auction attracted high demand, receiving bids totaling P58.9 billion, nearly double the amount offered. However, lenders requested an average yield of 6.207 percent, which is higher than the 6.118 percent in a previous auction. Still, this figure was lower than the 6.24 percent rate offered in the secondary market just days before the auction. Michael Ricafort, a chief economist at Rizal Commercial Banking Corp, noted that the decline in German bonds is affecting markets worldwide, including the Philippines. This trend follows German plans to increase spending on defense and infrastructure. For 2025, the Marcos administration plans to borrow P2.55 trillion to address a projected budget deficit of P1.54 trillion, or 5.3 percent of the country's GDP. The government aims to secure P507.41 billion from foreign sources and raise P2.04 trillion domestically, which includes P60 billion from short-term Treasury bills and P1.98 trillion through T-bonds. This strategy is expected to raise the total government debt to P17.35 trillion by the end of 2025.