Peso slides further to 29th record low this year at P63.361:$1

The Philippine peso further extended its slide beyond the P63 per dollar level on Wednesday, closing to its 29th historic low so far this year, as external pressures continue to weigh on the local unit.

The local currency shed 27.1 centavos of its value to close at P63.361:$1, from P63.09:$1 on Tuesday.

The peso opened at P63.01:$1 and hit an intraday low of P63.373:$1 and a high of P63:$1.

Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the peso’s weakness to the dollar’s continued strength as Brent crude oil price breached above $110 per barrel recently after Iran’s recent ship attacks in the Strait of Hormuz.

Ricafort also said the local unit declined a day before the widely expected 25 basis points interest rate hike by the Bangko Sentral ng Pilipinas, which already priced in by the market beforehand.

Philippine Institute for Development Studies (PIDS) senior research fellow John Paolo Rivera likewise said the peso’s weakness “reflects persistent dollar demand, global financial uncertainty, elevated oil prices, and growing concerns over the country’s external position, particularly the widening bop deficit. “

Latest data from the Bangko Sentral ng Pilipinas (BSP) shows the balance of payments (BOP) posted a $9.1-billion deficit as of end-September, wider than the $5.3-billion deficit in the same period last year.

The payments position takes into account Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds exited.

“Continued depreciation could raise import costs and add to inflationary pressures, especially for fuel, food, and transportation. While further volatility is possible, greater concern is not the record low itself but prolonged peso weakness that erodes household purchasing power and increases business costs,” Rivera said. — BM, GMA News

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