New all-time low as peso sinks to P59.13:$1

The Philippine peso depreciated for the ninth straight trading day on Tuesday to carve a fresh all-time low, following controversies on infrastructure spending, particularly on flood control projects.

The local currency dropped 23 centavos from its close of P58.9:$1 on Monday to P59.13:$1 on Tuesday. This is a new all-time low for the peso, surpassing the previous record of P59:$1 that was last seen on December 19, 2024.

The Bangko Sentral ng Pilipinas (BSP) earlier appreciated the recent movement in market sentiment, as the country continues to face corruption issues, particularly on flood control projects, which are now being investigated by both chambers of Congress, as well as an independent commission.

“The recent peso depreciation may reflect market concerns over a potential moderation in economic growth due in part to the infra spending controversy, as well as expectations of additional monetary policy easing by the BSP,” it said in a statement earlier on Tuesday.

President Ferdinand “Bongbong” Marcos Jr. in August bared that 20% of the total P545-billion budget for flood control projects went to 15 contractors, which he described as a “disturbing assessment.”

The United States Department of State, in its 2025 Investment Climate report earlier this month, flagged what it described as “pervasive” corruption in the Philippines as among the major barriers to foreign investment in the country.

The central bank also noted that the peso continues to be supported by remittances, a buffer against external shocks, relatively fast economic growth, low inflation, and ongoing structural reforms.

“The Bangko Sentral ng Pilipinas allows the exchange rate to be determined by market forces,” the BSP said.

“We continue to maintain robust reserves. When we do participate in the market, it is largely to dampen inflationary swings in the exchange rate over time rather than prevent day-to-day volatility,” it added.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort also attributed Tuesday’s close to the same concerns.

“The US dollar/peso exchange rate breached above 59.00… after local market sentiment [was] partly weighed [down] by local political noises in recent weeks as a potential distraction on the economy/reforms,” he said in a separate mobile message.

“Thus, improving local governance standards in terms of reforms/measures related to adherence to ESG standards, including anti-corruption/anti-leakage, anti-wastage on government spending, especially on infrastructure,” he added.

Ricafort noted, however, that these could be offset by the seasonal increase or inflows of dollars from the United States and the conversion of these into pesos to finance Undas and Christmas-related spending.

The next resistance is at P59.20, the intraday low recorded earlier on Tuesday. —VBL, GMA Integrated News