Philippine Peso Trades Near Record Low

The Philippine peso traded around 61.7 per US dollar in late July, hovering near its record low as the Bangko Sentral ng Pilipinas maintained limited intervention in the foreign exchange market while indicating only a small chance of further monetary tightening this year. The central bank intervened modestly last week to maintain orderly market conditions, with Governor Eli Remolona stressing that aggressively defending the peso against a strong US dollar would only deplete the country's foreign exchange reserves. While authorities remain concerned that the peso's weakness could fuel imported inflation, Remolona said the likelihood of aggressive rate hikes to bring inflation back to target remains small. Broad US dollar strength and elevated crude oil prices, which have weighed on Asia's oil-importing economies, have kept the peso under pressure, leaving the currency down more than 7% against the greenback so far this year.

The Philippine peso weakened to around 61.84 per US dollar in late July, moving closer to a fresh record low as surging oil prices and broad US dollar strength weighed on the currency. Crude prices have jumped more than 30% this month as the escalating US-Iran conflict spilled over into key other shipping routes, heightening concerns over deeper disruptions to global energy supplies. This has intensified pressure on oil-importing economies, including the Philippines, raising concerns over imported inflation and the country's trade balance. The Bangko Sentral ng Pilipinas intervened in the foreign exchange market this week to support the peso, while the Marcos administration expressed confidence that the central bank would act decisively if needed. Fitch Group's BMI Research forecasts the peso to trade within the 61–63 per US dollar range this year, making it one of Asia's weakest-performing currencies. The peso has fallen nearly 5% against the US dollar so far this year.

The Philippine peso fell to around 61.70 per US dollar in mid-July, moving back toward record lows as renewed conflict in the Middle East drove oil prices higher and weighed on emerging-market currencies. The decline highlighted the Philippines' vulnerability to rising energy costs, given its heavy reliance on imported fuel. Crude prices surged after fresh US and Iranian strikes, with Washington reimposing a blockade on shipping through the Strait of Hormuz, raising concerns over global oil supplies. The peso has lost more than 4% against the US dollar this year, heightening risks of imported inflation and adding pressure on the Bangko Sentral ng Pilipinas to support the currency. The central bank has already raised its benchmark interest rate by 25 basis points to 4.75% in June, its second consecutive increase, as policymakers sought to contain persistent inflationary pressures.