Philippine peso seen holding near P63 ahead of BSP rate decision

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Peso near P63 before BSP decision

Highlights

The peso closes at P62.985 per dollar on Friday, recovering from a record low of P63.06, but hits a new intraday low of P63.23.
Twenty of 22 economists in a BusinessWorld poll expect the BSP Monetary Board to raise policy rates by 25 basis points to 5.25% on Thursday.
Support for the peso may come from signs of central bank intervention above P63, lower global oil prices, and seasonal remittance inflows.

Peso range outlook before policy meeting

As reported by BusinessWorld Online, the peso recovers by 7.5 centavos on Friday to close at P62.985 per dollar, from its record low finish of P63.06 a day earlier, based on data from the Bankers Association of the Philippines' website.

The local currency still touches a new intraday record low of P63.23, worse than the previous trough of P63.15 seen the day before. Week on week, the peso declines by 18.4 centavos from its P62.801 finish on Oct. 9.

A trader says the peso slides early on Friday after faster-than-expected U.S. inflation strengthens expectations of a Federal Reserve rate hike later this month, while fresh tariff threats trigger risk-off sentiment. The currency later trims losses on profit taking before the weekend and as investors cut positions after the dollar-peso pair peaks.

A BusinessWorld poll conducted last week shows 20 of 22 economists expect the Monetary Board to raise rates by 25 basis points on Thursday, which would bring the policy rate to 5.25%. That level would match the benchmark rate set in June 2025 and mark the highest rate in one-and-a-half years since 5.5% in April 2025.

Market drivers and broader support factors

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort says sentiment improves after less hawkish signals from Fed Chair Kevin Warsh and lower global crude oil prices. He also points to signs of intervention when the peso moves above the P63 mark.

Additional support may come from a seasonal increase in remittances, export sales and dollar-to-peso conversions tied to holiday spending, Ricafort says. The trader expects the peso to move between P62.80 and P63.20 this week, while Ricafort sees a range of P62.70 to P63.20.

In our earlier article on Philippine stocks rebounding despite peso woes, we covered how the PSEi recovered on bargain hunting even as the peso sank to a fresh record low of P63.06 per dollar and briefly hit P63.15 intraday. We also noted that investor sentiment stayed cautious, while net foreign buying returned after several sessions of outflows, keeping attention focused on currency moves and broader macro conditions.

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