Singapore-based DBS Bank Ltd. projects a stronger outlook for the Philippine peso, expecting it to regain ground against the United States (US) dollar to the ₱54:$1 level by the end of next year, despite the currency’s recent slide to fresh record lows.

Based on DBS’ forecast published last Friday, Nov. 14, the peso is expected to gain against the dollar over the near term. From the latest low, DBS forecasts the dollar-peso exchange rate to drop to ₱56.3:$1 by the end of December.

The peso hit a new all-time low last Wednesday, closing at ₱59.17 per dollar, surpassing the previous record of ₱59.13:$1 set on Oct. 28.

DBS expects the peso will strengthen further to ₱55.8:$1 in the first quarter of 2026 and ₱55.3:$1 in the second quarter. It is then expected to breach the ₱55 level in the third quarter of 2026 at ₱54.8:$1, and strengthen further to ₱54.4:$1 by the end of next year.

Japanese financial giant MUFG Bank Ltd. said it expects remittances from Filipinos abroad to anchor the local currency. The Bangko Sentral ng Pilipinas (BSP) is set to release data on September remittances on Monday, Nov. 17.

“These remittances could help keep the peso steady, especially now that the dollar-peso exchange rate is nearing the ₱59 level,” MUFG said in a Nov. 14 report. “Remittance inflows due this week will be crucial for stability, with the risk-reward tilted toward dollar-peso easing lower if large inflows materialize.”

As of the end of August, cumulative cash remittances reached $22.91 billion, the largest year-to-date figure since 2022. This accounted for a bulk of personal remittances, which also climbed to $25.51 billion from $24.74 billion last year.

For MUFG, the peso could settle at a slightly stronger level of ₱58.7:$1 by the end of the fourth quarter, stabilizing at the ₱58:$1 level through the second quarter of next year, before slipping again to ₱58.5:$1 in the third quarter of 2026.

“Bond inflows from index inclusion, alongside low inflation and the lagged impact of earlier rate cuts, add to the supportive backdrop for the peso,” MUFG said.

Since the first quarter, the country’s gross domestic product (GDP) growth averaged five percent, falling short of the already lowered full-year growth target of 5.5 percent to 6.5 percent. The government attributed the worse-than-expected four percent growth in the third quarter to alleged corruption involving flood control funds.

MUFG said the sharp slowdown in output growth boosts the central bank’s confidence to further adjust the key interest rate lower. It expects that, with an “accommodative policy,” the BSP will further reduce the key interest rate to 4.5 percent at the Monetary Board’s (MB) final policy meeting in December.

Similarly, DBS anticipates a comparable easing by year-end, but expects another 25-basis-point (bp) cut to 4.25 percent in the first quarter of 2026, which the bank sees as the terminal rate.