Philippine Peso has been violated The P59-Per-Per-Dollar rate for the first time on Tuesday, amid market concerns of slowing economic growth and expectations of further currency cuts.
At the same time, the Bangko Sentral NG Pilipinas (BSP) said it will allow market forces to determine the peso-dollar exchange rate.
The local unit closed at P59.13 to compare the Greenback, which sank by 23 centavos from its P58.90 ending Monday, the Bankers Association of the Philippines data showed.
This was a new all-time high for the PESO, surpassing the previous record of P59 signed in Dec. 19, 2024.
Year to date, the PESO has depreciated by P1.285 or 2.17% from its P57.845 to D57.845 as of December 27, 2024.
The peso opened Tuesday’s session strong at P58.90 against the dollar, which was already at an all-time high. Its worst showing was at P59.20 against the Greenback.
Dollars exchanged rose to $1.75 billion on Tuesday from $1.6 billion on Monday.
“The recent decline in the peso may reflect market concerns about the potential moderation in economic growth partially offset by the controversial infrastructure spending,” the central bank said.
On Monday, Monetary Board member Benjamin E. Diokno said the BSP may cut its key interest rate again in December and going forward to 2026, as the economy “slows down a bit” due to corruption and fraud uncertainty.
The BSP earlier this month lowered the lending rate by 25 basis points (BPS) to 4.75%. It has cut rates by 175 bps since its inception to reduce the cycle in August 2024.
The BSP said the PESO will continue to be supported by “money manipulation, rapid economic growth, low inflation, and ongoing structural reforms.”
“The shift of foreign exchange from the business process to the exit of business, tourism, and overseas Filipino workers continues to be a shock to foreign exchange,” it added.
It also continued to maintain “strong” foreign exchange, which stood at $108.8 billion at End-September.
‘Market forces’
The BSP has also signaled that it can tolerate more weakness in the peso.
“When we participate in the market, it is mainly to absorb price changes in exchange rate changes over time rather than to hedge against future day fluctuations,” it said.
A trader said in an email that the peso fell after the latest signals from the BSP.
“The peso closed to record levels after the BSP ruled out any close-range intervention in the local FX market (foreign
The first head of metrocment investment
“Financially, Pass-through is very little from the weakness of the peso-dollar, but of course, the level of confidence is undermined by the weak peso,” he said.
Another trader said in a text message that the peso could remain at the P59 level in the short term if the weakness continues with periodic increases in Imptances.
“For some time to speak, we expect dollars to come in with the grace of currency payments. Therefore, we expect the natural support of the Peso to continue further,” said the trader.
RIMAL Commerce Banking Corp. Economist HikaEL L. Ricafut said on Viber that the local message is that local sentiments can be supported by changes in dealing with fraud.
“The US Dollar/Peso Exchange Rate will now be the task of the BSP in terms of Smoothing Smooring the volatility, as one of the major concerns going forward,” he said.
“Therefore, ignoring the BSP factor would be a mistake for those seeking higher standards.”
On Wednesday, both Mr. Ricafort and the first trader saw the peso moving from P58.95 to P59.20 per dollar. – They left him
