STRONG demand greeted the government’s latest retail treasury bond (RTB) offering, which drew P188.6 billion in tenders or more than six times the P30 billion initially eyed.
The coupon of the RTB 32 offering was set at 6.875 percent during the rate-setting auction, where the Bureau of the Treasury raised an initial P84.9 billion ahead of the Sept. 29 to Oct. 7 public offer period.
The RTBs, targeted at individual investors, can be bought with a minimum investment of P5,000. Interest will be paid quarterly, subject to a 20-percent withholding tax, and the bonds can be sold before maturity.
Eligible holders of existing securities can participate in an exchange offer.
The government is targeting about P150 billion in new money from RTB 32, while the amount to be raised through the exchange component will depend on investor appetite.
National Treasurer Sharon Alamanza said the Treasury chose the tenor because of elevated interest rates and to mark the 25th year of the RTB program.
She said the 2.5-year structure was partly designed to commemorate the milestone while avoiding the higher cost associated with locking in a longer-term borrowing rate.
“We’re still hoping that by next year, rates will moderate. So definitely, we don’t want to lock in at a very high rate,” Alamanza said.
The shorter tenor also reflects demand in the retail market, where Almanza said interest was concentrated toward shorter- to medium-term securities.
The Treasury, meanwhile, is continuing to explore liability-management transactions to manage the government’s debt maturity profile.
Almanza said the agency is considering another debt exchange or switch before the end of the year and was also exploring a possible foreign exchange-denominated bond issuance toward the latter part of 2026.
The two transactions could potentially be conducted together.
The Treasury is likewise exploring a retail dollar bond issuance with its investment managers.
In a related development, the bureau has notified all government securities eligible dealers that it was planning to raise a total of P892 billion from both short-term T-bills and long-term T-bonds in the last quarter of 2026.
The amount is 104.11 percent higher than the P437 billion programmed for the same period in 2025 but is lower than the P1.12 trillion set for the third quarter of this year.
Alamanza said the sharp year-on-year increase was largely due to the government’s decision last year to front-load most of its borrowing during the first half and third quarter, allowing it to complete most of its bond auctions before the fourth quarter.
“Last year, we were able to front-load most of our borrowing during half of the year, even during the third quarter,” she said.
As a result, the government had very few bond auctions scheduled in the fourth quarter of 2025 and relied mostly on short-term Treasury bills.
This year, however, the government has spread out its borrowing throughout the year amid market uncertainties, including the impact of the war in Iran, Almanza said.
“We’re still hoping that the environment will improve,” she said. “And if there will be improvements, it will smoothen our curve and our borrowing.
The Treasury is set to auction P462 billion in T-bills, which is scheduled every Monday, with tenors of 91 days, 182 days and 364 days.
Additionally, it aims to raise P430 billion through T-bonds ranging from two-and-half to 20 years, with auctions scheduled every Tuesday.
The government plans to borrow P2.73 trillion this year to finance the national government’s programs and projects.
Most of the borrowings will come from the domestic debt market totaling P1.92 trillion, down from the programmed P2.11 trillion in 2025.
Of the total, bulk or P1.81 trillion will be borrowed through the sale of fixed-rate T-bonds and another P110.18 billion will come from T-bills.
The remaining P815.5 billion came from external borrowing, up from 2025’s P543.24 billion. This will include program loans (P403.78 billion), project loans (P97.35 billion), and bonds and other inflows (P314.37 billion).
Almanza, meanwhile, said the government had already secured funding for obligations maturing this year, while debt falling due next year would form part of the government’s financing requirements for 2027.
She estimated the residual maturity of the government’s domestic debt at around 5.5 years, while external debt has a residual maturity of about 12 years. Combined, the government’s debt stock has a residual maturity of roughly seven years.
