The Philippine government plans to borrow P325 billion through short-term Treasury bills in the third quarter of 2025, banking on expectations of further interest rate cuts both locally and globally.
According to a memorandum released by the Bureau of the Treasury on Thursday, the government will raise the amount through weekly auctions of 91, 182, and 364-day T-bills from July to September. The borrowing program is broken down into P125 billion for July and P100 billion each for August and September.
While the short-term borrowing plan is clear, the Treasury has yet to disclose its strategy for long-term Treasury bonds this quarter.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the anticipated easing of the US Federal Reserve—possibly by as much as 50 basis points within the year—could influence local monetary policy. “There are also fiscal and debt concerns in the US amid Trump’s tax plan that could lead to elevated Treasury yields,” Ricafort warned, citing possible market instability.
He added that the Bangko Sentral ng Pilipinas (BSP) would likely mirror any policy moves from the US, especially after its recent 25-basis-point rate cut to 5.25 percent due to tame inflation and slower economic growth. The BSP is set to review its policy again on August 28.
Despite potential rate cuts, risks remain. Ricafort noted ongoing geopolitical tensions in the Middle East could trigger spikes in oil and other commodity prices.
The government continues to rely on borrowing to fund its budget shortfall, with a strategy that leans on the domestic market to reduce exposure to foreign currency fluctuations and build the country’s local capital market.
As of April 2025, the Philippines’ outstanding debt reached a record P16.75 trillion.
