The local currency the peso briefly sank to a record low this week, reflecting sustained weakness in the local currency as the Bangko Sentral ng Pilipinas (BSP) maintains a growth-focused stance. The peso fell to ₱59.13 per U.S. dollar on Tuesday before rebounding to ₱58.72 on Wednesday—its strongest in three months—after remarks from BSP Governor Eli Remolona tempered market concerns.
The peso’s slump has been fueled by multiple factors: rising global oil prices amid sanctions on Russian crude, persistent foreign outflows from local equities, a wide current account deficit, and investor caution over infrastructure spending and possible U.S. policy shifts impacting the BPO industry.
Despite the decline, the BSP remains dovish, signaling possible rate cuts to support slowing growth while inflation stays within target. Policymakers appear willing to tolerate a weaker peso, citing potential benefits from stronger household consumption through remittance gains.
BSP governor Eli Remolona Jr. stressed that the central bank does not target specific exchange rate levels and that interventions are meant only to smooth volatility driven by inflation, not to fix daily fluctuations. Analysts note that while the peso may be oversold, seasonal remittance inflows could lend short-term support, potentially strengthening the currency to around ₱57.80 per dollar by year-end.
Still, the peso remains one of the most actively speculated currencies in the region, highlighting market sensitivity to the BSP’s policy direction and the country’s external imbalances.
