Peso hits record low of ₱61.888 against US dollar

By Romeo Sualibios

The Philippine peso fell to a record low of P61.888 against the US dollar on Aug. 27, surpassing its previous all-time closing low of P61.847 recorded on July 24, as the local currency remained under pressure from global uncertaint goies and inflation concerns.

The weaker peso is expected to benefit overseas Filipino workers (OFWs) and their families in the short term, as every dollar remitted will be worth more in pesos. However, economists said the advantage could be offset by rising prices of imported goods and higher inflation, reducing consumers’ purchasing power.

Analysts attributed the peso’s decline to renewed strength in the US dollar, concerns over global oil prices amid geopolitical tensions in the Middle East, and expectations of higher inflation in the Philippines.

In response to persistent inflation risks, the Bangko Sentral ng Pilipinas (BSP) raised its benchmark interest rate by 25 basis points to 5 percent, marking its third consecutive rate hike this year. The central bank said the move aims to keep inflation expectations under control despite easing headline inflation.

The BSP said inflation risks remain elevated due to volatile global oil prices, the possible impact of a strong El Niño on food production, and potential wage adjustments, prompting the need for tighter monetary policy.

Market analysts said the rate increase may provide some support to the peso by making peso-denominated assets more attractive to investors, although external factors such as global market sentiment and the strength of the US dollar are expected to continue influencing the local currency’s movement.