Peso hits new record low amid corruption worries, typhoon losses

The Philippine peso fell to a new record low of ₱59.17 to the dollar last week, weighed down by ongoing investigations into alleged corruption involving government officials, including senators and congressmen, as well as economic losses from recent typhoons.

Experts said the peso is under pressure from strong demand for the US dollar and declining market confidence. 

The currency, which hit a previous all-time low of ₱59.13 late last month, closed weaker by 18.5 centavos, opening the week at ₱58.95:$1 and trading between ₱58.91 and ₱59.19. Trading volume reached ₱1.716 billion, up from ₱1.475 billion previously.

John Paolo Rivera, senior fellow at the Philippine Institute for Development Studies, said the depreciation was expected, driven by global dollar demand amid expectations that the US Federal Reserve will maintain higher interest rates, combined with persistent trade deficits and weak foreign inflows.

“The combination of sluggish exports, slower government spending, and declining FDI has reduced foreign currency supply just as import needs remain high,” Rivera noted. He added that governance concerns and slower economic growth have further dampened investor confidence.

Without a boost in dollar inflows from remittances, tourism, or exports before year-end, Rivera forecasted that the peso could weaken further to ₱60 to the dollar. 

“Stabilization will depend on faster fiscal disbursements, stronger FDI signals, and clear policy actions that restore both investor and market confidence,” he said.

The Bangko Sentral ng Pilipinas (BSP) previously said it could allow further peso depreciation, letting market forces set the exchange rate while maintaining “robust” reserves. 

The central bank clarified that it intervenes only to smooth inflation-driven swings, not daily volatility, and noted that the peso is supported by steady remittances, low inflation, ongoing reforms, and relatively strong economic growth.

BSP data showed that gross international reserves (GIR) rose to US$109.7 billion in October from US$109.1 billion the previous month—the highest since October last year’s US$111.08 billion. 

The central bank said this provides a robust external liquidity buffer, enough for 7.3 months’ worth of imports and payments, and about 3.7 times the country’s short-term external debt. TRACY CABRERA