Philippine Peso Slides to Record Low

The Philippine peso depreciated to around 63 per dollar in mid-October, hitting a record low as concerns over the country's economic outlook worsened. The IMF warned that the Philippines could record the fifth-slowest economic growth in Southeast Asia this year, projecting GDP growth of 3.4%, down from 4.4% in 2025, as weak investment and elevated inflation weigh on economic activity. Growth has remained subdued, with the energy crisis triggered by the Middle East war adding to the lingering fallout from the flood control scandal. The IMF also projected the jobless rate to ease to 5.2% by 2027, but remain above its previous estimate of 4.6%. Continued depreciation of the Philippine peso has intensified calls for central bank intervention, with Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noting that additional interest rate hikes are becoming more likely to help stabilize the currency.

The Philippine peso depreciated past 62 per dollar on Friday, hitting a new all-time low as concerns over the domestic inflation outlook kept pressure on the currency. The move came despite the Bangko Sentral ng Pilipinas raising its policy rate by 25 bps to 5% in a third straight hike, described as a preemptive move. The BSP raised its 2027 inflation forecast to 5.4% from 4.5%, citing risks from severe El Niño conditions and higher minimum wages, while lowering its 2026 forecast to 6.1% amid easing oil prices. Still, elevated oil prices continue to pose a risk to the peso, as the Philippines imports almost all of its oil needs, potentially widening the current-account deficit and adding to domestic inflation pressures. Governor Eli Remolona said the central bank would focus on smoothing sharp currency movements rather than defending a specific exchange-rate level. The peso has now lost more than 5% against the dollar this year, leaving it among Asia’s weakest performers.

The Philippine peso weakened past 61.8 per dollar, hitting a new all-time low as rising oil prices put renewed pressure on the currency. The peso surpassed the previous record low of 61.850 set in July, as Brent crude jumped more than 5% over the past four days amid renewed Middle East tensions and concerns over energy supplies. The Philippines is particularly vulnerable to higher oil prices as it imports almost all of its oil requirements, raising the risk of stronger inflationary pressures. The Bangko Sentral ng Pilipinas has already raised its policy rate to 4.75% and intervened in the foreign-exchange market, but continued oil gains and elevated global bond yields could keep pressure on the currency. President Ferdinand Marcos Jr. also indicated that they will not use all of the country’s reserves to defend the peso. The currency has now lost more than 5% this year, ranking among Asia’s weakest performers, while foreign-exchange reserves have fallen nearly 7% to $103 billion.