towards Aaron Michael C. Sy, Reporting
The peso fell to a new all-time low against the dollar on Wednesday as the dollar gained on hopes of a US government reopening, while the local unit dragged on expectations of slower growth.
The local unit closed at P59.17 to compare the greenback, sliding by 18.5 centavos from its P58.985 on Tuesday, Bankers Association of the Philippines data showed.
This surpassed the previous record of P59.13 against the US dollar on Oct. 28.
Year to date, the PESO has depreciated by P1.325 or 2.24% from its P57.845 on December 27, 2024.
The peso opened Wednesday’s session slightly stronger at P58.95 against the dollar. It entered the best position of P58.91 positive, while its worst showing was at P59.19 against the Greenback.
Dollars exchanged rose to $1.72 billion on Wednesday from $1.47 billion on Tuesday.
The dollar was generally strong on Wednesday above the market on the possibility of bankruptcy of the US government, Rizal Commerce Banking Corp. Economist Michael L. Ricafut said on Viber.
“The peso weakened significantly after the US Senate successfully approved a temporary spending bill that will fund the US government until Jan. 30, 2026,” the trader said in a Viber message.
The US House of Representatives was set to vote Wednesday on a federal funding plan to end the longest shutdown in US history, following the Senate’s approval of a compromise on Monday.
The demand for the dollar was supported and with the expectation that the US Federal Reserve will maintain high rates for a long time, the Philippine center to find the top research studies John Paolo R.IRA RE in a Viber message
The Fed ond for the month of 25 rates (BPS) to bring its target rate to 3.75%-4% range.
However, the expectations of the rate determined at the meeting of the Fed 17-18 melted after the chair of the descent of Jerome H. Powell questioned its need, and some officials continued to be divided on its final policy decision of the year.
“The combination of exports, slow spending, and a decline in foreign direct investment (FDI) has reduced the supply of foreign currency as import requirements such as imports remain high,” said Mr Reara.
The local unit was also dragged down by weak energy as damage from recent typhoons could continue to weaken economic activity, one trader said by telephone.
“Locally, market confidence is being tested again with management issues and slow growth, making investors more cautious,” said Mr. Rivera.
In the third quarter, the Philippine economy grew by 4%, its slowest pace in more than four years amid a slowdown in household spending and government spending. This is as suspected to flood the control of dirty investor and consumer sentiments.
In the nine months to September, GDP growth reached 5%, putting the Government’s 5.5%-6.5% of the full year’s full budget out of reach.
Mr. Rivera said the peso could stay within the P59 to P60 per dollar range unless strong dollar inflows are seen in pharmacies, tourism, or exports.
“In the coming months, stability will depend on a quick fiscal outlook, as well as strong signs of FDI, and clear policy actions that restore both investors and market confidence,” he said.
The first trader said that the PESO could lose further on Thursday if the US government shutdown is resolved.
The first trader sees the peso moving between P59 and P59.25 per dollar, while the second trader sees it starting at P59.30 on Thursday.
Mr. Ricafort sees the local unit trading between P59.05 and P59.25 on Thursday.
