Peso revisits all-time weakest of P56:45:$1

The peso hit an intraday high of P56:45 vis-à-vis the US dollar on Tuesday, July 12, its weakest level in the history of the country’s exchange rate.

It closed at P56.37, a fresh 17-year high, from Monday’s P55.979. The local currency opened weaker at P56.16 and hit an intraday peak of P56.45. The last time the peso was at P56.45 was October 2004, during the Arroyo administration.

The Bankers Association of the Philippines’ weighted average rate for the peso was P56.318 from P55.947 last July 11. Total volume reached $1.388 billion.

Last week, the inter-agency Development Budget Coordination Committee (DBCC) revised and widened its exchange rate assumption for 2023 to 2028 to P51 to P55 versus the greenback. The previous DBCC peso-US dollar assumption was P51 to P53. The peso broke past P53 last June 10. By June 17, it depreciated further to P54 and then to P55 last June 29. The peso hit P56 on July 7.

The Bangko Sentral ng Pilipinas (BSP) does not release any forecasts for the exchange rate, but for the purpose of setting the national government budget, the government and the BSP has a peso-dollar rate assumption.

The country's exchange rate policy supports a freely floating exchange rate system where the BSP leaves it to market forces to dictate the exchange rate level. The BSP will only enter the spot market to ensure “order and temper destabilizing swings” in the peso-US dollar rate.