Philippine peso hits new record low as dollar strength pressures currency

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Philippine peso record low

Highlights

The Philippine peso closed at a new record low of P63.09 per dollar on Monday, dropping 10.5 centavos from Friday, amid surging dollar strength.
Year-to-date, the peso has depreciated by P4.3 or 6.82%, intensifying concerns over inflation pass-through and policy response ahead of the Bangko Sentral ng Pilipinas meeting.
Economists cite elevated global crude prices, persistent trade deficit, and strong U.S. Treasury yields as key drivers of peso weakness, with further BSP rate hikes widely expected.

Trading moves and drivers behind the decline

As reported by BusinessWorld Online, the peso closes at P63.09 per dollar on Monday, weakening by 10.5 centavos from Friday's P62.985 finish and surpassing the previous record low of P63.06 set on Oct. 15.

The local currency opens slightly firmer at P62.98, which is also its intraday best level, before sliding to as weak as P63.17. Dollar trading volume rises to $1.778 billion from $1.598 billion.

China Banking Corp. Chief Economist Domini S. Velasquez says the peso remains broadly stable despite renewed U.S. dollar strength, with the dollar also gaining against the yen, pound and euro. She says the peso's relative stability suggests the recent weakness is being driven more by the stronger dollar and other external factors than by domestic sentiment.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort says elevated global crude oil prices are also driving dollar demand. Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas adds that the peso is weaker ahead of the Bangko Sentral ng Pilipinas policy meeting on Thursday.

Inflation risks and policy pressure build

Year to date, the peso has depreciated by P4.3, or 6.82%, from its P58.79 finish on Dec. 29, 2025. That sustained weakness is increasing scrutiny on how exchange-rate pressure could feed through to consumer prices and domestic demand.

The BSP is expected to deliver a fourth straight 25-basis-point hike this week, according to 20 of 22 economists in a BusinessWorld poll. A trader says peso weakness is likely to remain a recurring theme because of the Philippines' structural trade deficit, elevated U.S. Treasury yields and expectations of further tightening by the U.S. Federal Reserve.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera says the peso will likely continue to weaken, although easing oil prices and improving global financial conditions may offer some support. He says the bigger concern is not a fresh record low by itself, but prolonged depreciation that lifts inflation and erodes household purchasing power.

For the near term, Mr. Ricafort sees the peso moving between P63 and P63.20 on Tuesday, while Mr. Ravelas expects a range of P62.95 to P63.30 against the dollar.

Our earlier article on Philippine markets covered a session where bargain hunting lifted the PSEi despite persistent currency pressure, as investors returned to beaten-down stocks after recent losses. In that report, the peso still sank to a then-new record low of P63.06 per dollar and briefly weakened further intraday, keeping overall sentiment cautious even as foreign buying turned positive.

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