Peso recovers slightly after hitting record low

The Philippine peso recovered slightly on Thursday, closing at ₱58.69 against the US dollar after touching a record low of ₱59.13 the other week. The local currency strengthened by 44 centavos from its previous level of ₱59.26 to $1.

Analysts said the Bangko Sentral ng Pilipinas (BSP), which earlier signaled tolerance for a weaker peso, may have intervened in the foreign exchange market to stabilize the currency. However, they cautioned that the peso could still breach the ₱60 mark if the US dollar continues to strengthen.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said the peso’s rebound below the ₱59 psychological level could indicate central bank intervention. “The latest downward correction to below the ₱59 psychological mark could have signaled intervention in the local foreign exchange market,” Ricafort said.

Philippine Institute for Development Studies senior fellow John Paolo Rivera warned that the peso could weaken past ₱60 if external inflows decline, investors pull out due to corruption concerns, or overseas Filipino workers’ remittances slow down.

“Still, holiday-induced remittances could help mitigate further depreciation and prevent inflationary pressures that might prompt the BSP to pause further rate easing,” Rivera said.

Reyes Tacandong & Company senior adviser Jonathan Ravelas agreed, noting that while hitting ₱60 is possible, it is not inevitable. “The BSP has the firepower to defend the peso and our core fundamentals are still solid. What’s weighing us down is uncertainty—especially from the floodgate scandal and tariff issues that have strengthened the dollar,” he said.

Ravelas added that the central bank is expected to “act decisively if global shocks worsen or volatility spikes.”

In a statement, the BSP reiterated that the exchange rate remains market-determined and that the country’s foreign exchange reserves are “robust.” “When we do participate in the market, it is largely to dampen inflationary swings in the exchange rate over time rather than to prevent day-to-day volatility,” the BSP said.

Bank of the Philippine Islands senior economist Jun Neri said the peso’s weakness stemmed from factors such as continued foreign selling in the local stock market, the BSP’s willingness to keep cutting interest rates, and uncertainty over corruption issues linked to infrastructure projects.

“With inflation at manageable levels, the BSP might see the recent depreciation as tolerable. It might not be a concern as long as the inflation forecast for the next two years remains within the target,” Neri said.

SM Investments Corporation economist Robert Dan Roces said the main concern was the peso’s volatility rather than its current level. “What matters now is the speed and behavior of the move. A calm drift is tolerable; a rush risks sentiment and inflation expectations. I think it’s more of an orderly pace at the moment,” Roces added. TRACY CABRERA