The Bureau of the Treasury (BTr) said it will offer 10-year fixed-rate treasury notes next week as part of the government’s financing program for this year.
A BTr notice of offering addressed to all government securities eligible dealers (GSEDs) and posted on the BTr website on Tuesday evening said the peso-denominated notes due 2035 will have a minimum nominal principal amount of P30 billion.
The agency added, however, “The Republic reserves the right to increase the overall size of the issue.”
In a Viber message, National Treasurer Sharon Alamanza said, the T-notes offer “will establish our new 10-year benchmark bond. It will be priced during our auction next week, but we will have an offer period until April 24 for investors to participate and place their orders.”
Alamanza said this issuance forms part of the government’s domestic financing for 2025.
The notes will be auctioned on April 15 and offered until April 24. The BTr, however, has the option to shorten the public offer period.
The settlement date for the issue is April 28.
The BTr said the notes will be sold in minimum denominations of P10 million and integral multiples of P1 million.
GSEDs can submit one bid per interest rate with a maximum volume of P10 billion.
“GSEDs may submit a maximum of 10 bids at different rates capped at P10 billion,” the BTr said.
“The interest rate shall be based on current market levels of comparable securities rounded down to the nearest one-eighth of one percent,” the agency said.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said in a message yesterday the average auction yield of the upcoming offer could be similar to the 6.14 percent 10-year Bloomberg Valuation Service rate as of April 9, 2025.
“Recent volatility in the US/global stock markets would still increase the appeal of safer havens such as Treasury bonds. (The) possible -0.25 local policy rate cut on April 10, 2025, would also support sentiment on the treasury auction,” Ricafort said.
“However, an external risk factor is the volatility in the comparable benchmark 10-year US Treasury yield at new 1.5-month highs, now at 4.49 percent, sharply up from the immediate low of 3.86 percent posted on April 4, 2025, amid retaliatory tariff/trade measures between the US and China lately,” he added.
Based on the Budget of Expenditures and Sources of Financing for 2025, the government’s gross borrowings are projected to hit P2.55 trillion this year.
The amount is lower than the P2.565 trillion in gross borrowings in 2024.
Of this year’s proposed borrowings, P2.04 trillion is expected from local lenders and P507.41 billion from foreign creditors.
Earlier this week, the government’s gross borrowings fell 36.22 percent in the first two months of 2025 due to a sharp drop in domestic loans.
BTr data showed the government’s total borrowings in January to February 2025 amounted to P552.692 billion, from P866.573 billion a year earlier.
Of the government’s total gross borrowings, P293 billion was owed to local lenders and P259.692 billion to foreign creditors.
Loans from domestic sources shrank by 63.38 percent from P800.186 billion a year earlier.
Conversely, borrowings from foreign lenders rose 291.18 percent to P66.387 billion from January to February 2024.
