Philippine peso hits record low as dollar strength pushes rate past P63

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Peso hits record low

Highlights

Philippine peso closes at a record low P63.06 per dollar, down 19 centavos day-on-day and 6.77% year to date from P58.79.
Gross international reserves drop 8.3% to $99.997 billion in September, marking a three-year low and the seventh straight month of annual contraction.
Dollar strength, high U.S. rates, rising oil prices, weak reserves, and domestic inflation concerns drive ongoing peso depreciation and elevated FX market volatility.

Drivers behind the peso's slide

As reported by BusinessWorld Online, the peso falls by 19 centavos to close at P63.06 against the dollar from P62.87 on Wednesday, breaking its previous record low of P62.90 on Oct. 8.

The currency opens slightly stronger at P62.83 per dollar and reaches an intraday high of P62.75, before sliding to a record intraday low of P63.15. Dollar trading volume rises to $1.5 billion from $941 million, while the peso is down P4.27, or 6.77%, year to date from its P58.79 finish on Dec. 29, 2025.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion says the move beyond P63 reflects persistent dollar strength after stronger U.S. inflation data reinforced expectations of higher U.S. rates for longer. He adds that high U.S. Treasury yields, elevated crude oil prices and geopolitical uncertainty continue to support demand for the dollar.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera says the peso's decline also reflects domestic concerns over inflation and investment inflows. Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas adds that the currency is also weighed down by a decline in the country's gross international reserves.

Reserve pressure and market implications

The country's dollar reserves drop 8.3% to $99.997 billion in the nine months to September from $109.06 billion a year earlier. The level is the lowest in three years since $98.116 billion in September 2023, and marks the seventh straight month of annual contraction in gross international reserves.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort says there could have been intervention from the Bangko Sentral ng Pilipinas to smooth market volatility near P63.10, with the psychological ceiling effectively shifting higher. BSP Governor Eli M. Remolona, Jr. earlier says the central bank does not defend the peso at a specific level if that risks depleting reserves, and intervenes only to smooth inflationary swings.

Market participants say the dollar-peso is likely to remain volatile in the near term, with one trader noting sustained peso strength is difficult while the Philippines remains a net importer. Another trader says the currency is tilted to the weaker side as the BSP enters its quiet period ahead of its Oct. 22 meeting; the central bank has been on a tightening path since April, raising rates by a total of 75 basis points to 5%.

Analysts say the peso could find support if U.S. inflation eases and expectations for the Fed become less hawkish. Federation of Philippine Industries Chairperson Elizabeth H. Lee says the weaker peso could help exports, but warns that competitiveness also depends on efficient logistics, unclogged ports and supply chains that can support manufacturers.

Our earlier article on the Philippine stock market rebound noted that the PSEi managed to close higher on bargain hunting even as the peso slid to a fresh record low of P63.06 per dollar and briefly hit P63.15 intraday. We also highlighted how foreign flows turned positive after several sessions of net selling, while investors stayed cautious given the currency’s weakness and the broader macro backdrop.

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