The Philippine peso sank deeper into record-low territory on Monday, October 19, closing further below the 63-per-dollar mark as a stronger US dollar, elevated oil prices and mounting global uncertainties kept pressure on the local currency.
Data from the Bankers Association of the Philippines showed the peso closed at 63.09 against the greenback, shedding 10.5 centavos from its previous finish.
This surpassed the previous all-time low closing of 63.06 set on Oct. 15.
During trading, the peso fell as far as 63.17 before trimming some of its losses.
Total trading volume rose to $1.8 billion from $1.6 billion in the previous session.
John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said the latest depreciation reflected a combination of dollar strength, elevated oil prices, geopolitical uncertainty, increased demand for foreign currency and a widening dollar deficit.
As it is, the weaker peso comes as the central bank also announced that the Philippines’ dollar deficit swelled to $3.14 billion in September, its largest shortfall since the $4-billion gap recorded in January 2025.
“Depreciation could continue while these conditions persist, although some stabilization is possible if oil prices ease and global financial conditions improve,” Rivera said.
“The greater concern is not another record low itself but prolonged depreciation that translates into higher inflation and weaker household purchasing power,” he added.
A trader, who cited similar factors behind the peso’s weakness, said the strength of the US dollar could also be traced to expectations of higher US interest rates.
“Elevated US Treasury yields and expectations of further Fed tightening are putting pressure on interest rate differentials, making dollar assets more attractive. Higher oil prices add to dollar demand and imported inflation risks,” the trader said.
“Persistent peso weakness could therefore put additional pressure on the Bangko Sentral ng Pilipinas to tighten monetary policy, particularly if inflation expectations begin to rise,” the trader added.
Higher US interest rates could make dollar-denominated assets more attractive to investors, putting additional pressure on currencies such as the peso, which is already under strain from elevated global oil prices.
The pressure comes as the BSP prepares for its next policy meeting on Thursday, Oct. 22, with all 20 economists polled by the Inquirer expecting another rate increase amid stubbornly high inflation. The central bank has raised its benchmark interest rate by a total of 75 basis points through three 25-basis-point increases since April, bringing the policy rate to 5 percent.
However, this monetary tightening has yet to prop up the peso, which has traded well below the 60-to-62-per-dollar range assumed by the Marcos administration for this year. (Nyah Genelle C. De Leon © Philippine Daily Inquirer)
