The Philippine government has successfully raised ₱30 billion by issuing long-term debt securities, specifically five-year Treasury bonds, despite a decrease in demand from local investors.

This auction, conducted by the Bureau of the Treasury (BTr) on June 10, attracted bids totaling ₱57.7 billion, indicating nearly double the amount offered.

However, this figure fell short of the ₱71.7 billion in tenders recorded during a similar auction on May 6, showcasing a reduction in investor interest.

The awarded bonds feature an average interest rate of 6.124 percent, an increase of 4.3 basis points from the previous auction’s rate of 6.081 percent.

Moreover, this rate is 5.2 basis points higher than the 6.072 percent rate for comparable corporate bonds currently available in the secondary market, according to the PHP Bloomberg Valuation (BVAL) Service Reference Rate.

Economists have attributed the rising interest rates to national government yield trends and fluctuations in US Treasury yields.

Recent economic developments, including progress in US-China trade relations, stronger-than-expected employment statistics from the United States, and a rise in global oil prices to two-month highs, have contributed to the decreased likelihood of US Federal Reserve rate cuts.

The Philippine government’s borrowing strategy focuses largely on domestic markets to minimize foreign exchange risk.

The ratio of the government’s outstanding debt reached 62 percent of the country’s gross domestic product (GDP) in the first quarter, marking the highest level in two years, a significant increase from 60.7 percent recorded at the end of 2024. This debt composition indicates that domestic debt makes up 42.3 percent of GDP, while foreign debt accounts for 19.7 percent.