Peso weakens to P63.52:$1, the 30th record low of 2026

The Philippine peso depreciated further against the US dollar on Thursday to mark its 30th record low so far this year, amid inflationary concerns as global oil prices continue to increase amid the ongoing conflict in the Middle East.

The local currency shed 15.9 centavos to close at a new all-time low of P63.52:$1, surpassing Wednesday’s finish of P63.361:$1, the previous record. It weakened to as low as P63.545:$1 during the trading session.

A local trader attributed Thursday’s depreciation to growing domestic inflationary concerns, which could weaken the peso even further, as the Bangko Sentral ng Pilipinas (BSP) hiked its 2027 inflation forecast to 6.0% from 5.4% previously.

The central bank cited the movement in global oil prices as one of the drivers of revision, with Brent crude futures up to $11.49 a barrel early and West Texas Crude Intermediate at $99.47. The hikes came as the US and Israeli militaries have reportedly drawn plans for renewed strikes on Iran.

The central bank kept its 2026 inflation forecast unchanged at 6.1%, above the BSP’s inflation target of 2.0% to 4.0%. The 2028 forecast was also kept at 3.3%.

“We are concerned because it [the peso depreciation] might be inflationary,” BSP governor Eli Remolona Jr. told reporters in a briefing in Manila City.

Remolona noted, however, that the current conditions have not yet met the central bank’s threshold that would drive up inflation. He did not elaborate on the threshold, as he said divulging it could lead to speculators coming in and out of the market.

“We don’t defend the level or price, so we let the market determine that. Hopefully the market gets it right in the long term,” he said.

“When we intervene, we get a number. They tell us the kind of threshold where if we let the exchange rate go beyond that, then it becomes inflationary and then we come in. We kind of come in without using up too much of our reserves, and then we end up just dampening the swing in the peso,” he added. — BM, GMA News

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