The Bureau of the Treasury (BTr) made a partial award of its reissued dual-tranche bond offer worth P35.1 billion on Wednesday as interest rates in the secondary market still reflected investors' concerns about Trump's tariffs and other economic policies.

BTr initially set a total of P40 billion for the dual-tranche offer consisting of debt papers with a remaining term of two years and 10 months, while the second tranche carries a remaining maturity period of 24 years and seven months.

The Treasury made a full award of P20 billion for the first tranche which fetched an average rate of 5.760 percent, lower than the 5.7903 percent recorded in the secondary market on Wednesday and the 5.7915 percent seen on Tuesday.

Secondary-market data were sourced from the PDS Group's website which displays the PHP BVAL Reference Rates. These are calculated by Bloomberg Finance Singapore L.P. and its affiliates.

Total bids for the first tranche amounted to P40.7 billion or 2 times oversubscription.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the lower interest rate was recorded after US President Donald Trump announced that Israel and Iran agreed to a ceasefire.

Thus, inflationary risks to investors subsided as global oil prices eased.

"Global crude oil price declined to new two-week lows, erasing all of the increase in global crude oil prices since the Israel-Iran attacks started on June 13, 2025," he said.

"This would help ease the recent pressure on imported prices and overall inflation," Ricafort continued.

Bloomberg's data on Wednesday showed the price of US-sourced crude oil at $64.96 per barrel while Europe's Brent crude stood at $67.78 per barrel, slipping from the intraday high of $78.40 per barrel seen on 23 June when Iran fired missiles toward the US military base in Doha, Qatar.

However, Ricafort said investors remained wary of global economic challenges as the total bids of $40.7 billion for the three-year reissued bonds dropped from the P63.922 billion recorded for the similar tenor auctioned on 14 May 2025.

BTr made a partial award of the second tranche at P15.1 billion out of the initial program of P20 billion as the average rate hit 6.649 percent, higher than the 6.6455 percent in the secondary market on Wednesday and the 6.6475 percent on Tuesday.

The latest rate was also an increase from the 6.476 percent of the similar 25-year bond offered on 25 March 2025.

Ricafort said investors remained concerned about the impacts of Trump's economic policies which convinced global credit rating agency Moody's to downgrade its rating for US government bonds.

"The local Treasury rate for the longer tenor was seen amid the higher long-term US Treasury yields due to US' debt concerns amid Trump’s tax plan," the economist said.

"The BTr result came after the similar 20-year US Treasury yield stood at 4.83 percent among four-month highs," Ricafort continued.

Moody's lowered its credit rating on US government bonds by one notch to Aa1 from Aaa in May due to the foreign country's rising debt and interest rates over a period of more than a decade compared to similarly rated countries.

"The US Treasury yield is the benchmark for borrowing costs for many governments and businesses globally so other global bonds could move higher with the US Treasury yields," Ricafort said.

"Any resulting volatility in the US financial markets could still have indirect impacts to the local financial markets," he added.