Philippine Treasury Publishes November 9 Auction Results as Inflation Hits 7.8% and Growth Slows
Key Facts
The Philippine Bureau of the Treasury listed the results of the Treasury bill auction held on November 9, 2026, and published an announcement describing the auction results as "mixed." This coincided with annual inflation accelerating to 7.8% in October, from 7.2% in September, according to the Philippine Statistics Authority. Average inflation was 5.6% from January to October. Meanwhile, gross domestic product growth slowed to 2.1% year on year in the third quarter, compared with a revised reading of 2.4% for the second quarter. These indicators put the paths of prices and economic activity at the center of monetary policy calculations, while the Treasury announcement alone does not determine the direction of future interest rates.
The clearest price pressure came from transport, where the annual change in the index accelerated to 20.1% in October, from 14.6% in September, according to the statistics authority. Inflation in housing, water, electricity, gas and other fuels also rose to 9.3%, from 8.4% in the previous month. Acceleration extended to core inflation, which excludes some food and energy components, reaching 5.4% after 4.8% in September. The simultaneous rise in headline and core measures indicates that October's increase was not limited to the headline inflation reading alone. These figures come as investors weigh the price path among the factors influencing government borrowing costs.
But the economic picture is not limited to price pressures: services led growth in the third quarter with an annual increase of 3.7%, while agriculture, forestry and fishing contracted 4.8%, and industry declined 0.003%, according to the statistics authority. On the demand side, household consumption grew 2.4% year on year, while gross capital formation fell 0.2%. These readings reveal divergence across sectors, with services remaining in growth territory while agriculture and industry contracted. Slower household consumption and a decline in capital formation also add to the picture of weaker growth in the third quarter. Central bank Governor Eli Remolona had said that a widening of the output gap to a significantly negative level makes the bank "less likely" to tighten, linking the decision to inflation and growth.
The Treasury bill auction followed a bond auction on November 4, in which the Treasury awarded only partial bids for a reissue of bonds amid weak investor risk appetite, according to the Bureau of the Treasury. Bids submitted for seven-year bonds totaled 21.940 billion pesos against a target offer of 30 billion, and the Treasury accepted 15.543 billion pesos, according to BusinessMirror. In the secondary market, AsianBondsOnline data showed the two-year government bond yield at 7.263% at the November 6 close, down 6.5 basis points for the week. The five-year bond yield was 7.796% after a weekly decline of 18.1 basis points, while the 10-year yield stood at 7.913%, down 22.1 basis points. The three yields nevertheless remained higher year to date, according to the same data.
The central bank had raised its target rate for the reverse repurchase agreement by 25 basis points to 5.0% at its meeting on August 27, 2026. At the end of September, national government debt stood at 19.66 trillion pesos, according to the Bureau of the Treasury, while the weighted average interest rate on 91-day Treasury bills was 5.431% on September 21, according to a statistics authority summary citing Treasury data. The size of the debt and the cost of financing make auction developments relevant to tracking government borrowing needs. The auction reading published on November 9 remains part of this trajectory, alongside yield movements in the market. The next monetary policy milestone on the central bank's calendar is the Monetary Board meeting on December 17, 2026.