The Philippines raised 84.9 billion pesos ($1.36 billion) in a retail Treasury bond auction Tuesday, with bids reaching 188.6 billion pesos. The 2.5-year bonds due 2029 carry a 6.875% coupon, comparable to existing yields. National Treasurer Sharon Almanza said the shorter tenor is strategic given elevated rates and a defensive market, adding the government hopes rates moderate by next year.

The bonds will be offered to the public through Oct. 7, with existing holders able to exchange notes due this year and next. Retail bonds, typically sold in 5,000-peso denominations, are a major financing source for Manila, comprising a significant share of annual borrowings. The August 2025 issuance raised 507.2 billion pesos, following a record 585 billion pesos in February 2024.

The program, launched in 2001, helps President Ferdinand Marcos Jr.'s administration reduce borrowing costs amid high inflation and a global debt selloff. The central bank has signaled further rate hikes as inflation accelerates due to a falling peso and rising oil prices. The government targets 150 billion pesos in new money from this exercise, funding agriculture, education, healthcare, and infrastructure projects.