The national government plans to significantly increase its peso-denominated fund-raising at the start of 2026, positioning itself to take advantage of a lower interest-rate environment following successive policy reductions by the central bank.
According to a memorandum circulated by the Bureau of the Treasury to accredited dealers, the state intends to secure P824 billion from the domestic market in the first quarter alone. This amount nearly doubles the P437 billion programmed for the final quarter of 2025.
The strategy is anchored on the easing cycle of the Bangko Sentral ng Pilipinas, whose Monetary Board has trimmed key policy rates by a cumulative 200 basis points since August 2024, bringing the benchmark rate to 4.5 percent.
“Lower local policy rates since August 2024 and further monetary easing would encourage and make local borrowings cheaper in terms of lower interest payments with no risk of forex losses that entail foreign borrowings,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corp..
Under the first-quarter borrowing plan, Treasury bills worth P324 billion will be auctioned weekly, offering tenors of 91, 182, and 364 days. The remaining P500 billion will be raised through Treasury bonds with maturities ranging from three to 25 years, to be offered at auctions held every Tuesday.
For the full year, total government borrowings are set at P2.68 trillion. Of this amount, P2.05 trillion is expected to be sourced domestically, slightly lower than the P2.11 trillion programmed for 2025. Fixed-rate Treasury bonds will account for P1.99 trillion, while Treasury bills will contribute P60 billion.
The balance, amounting to P627.1 billion, will be raised from external sources—higher than the P488.17 billion target this year—through a mix of program loans worth P263.3 billion, project loans totaling P61.7 billion, and bonds and other foreign inflows estimated at P302.1 billion.
