The peso weakened to a fresh record low on Thursday, Jan. 15, as domestic and global factors combined to pressure the local currency.
The peso fell to ₱59.46 per dollar, slipping from its previous all-time low of ₱59.44 reached on Wednesday. The currency touched an intraday low of ₱59.47 after opening the session at ₱59.43, according to data from the Bankers Association of the Philippines.
Trading volume increased to $1.079 billion, up from $951 million the prior day.
The decline followed heightened expectations that the Bangko Sentral ng Pilipinas will extend its interest-rate easing cycle. Strategists noted that a shift toward lower rates, currently at a 4.5 percent benchmark, typically reduces the yield appeal of local assets.
“This has put pressure on the local currency,” said Jonathan Ravelas, a senior adviser at Reyes Tacandong & Co. Ravelas expects the dollar-peso pair to fluctuate between 59.25 and 59.50 in the immediate term.
While the central bank has sought to stabilize the market, global geopolitical tensions are exacerbating the currency’s slide. Rising friction between the United States and major oil producers, including Venezuela and Iran, has soured investor sentiment toward emerging market assets.
Recent US strikes in Venezuela and threats of military action in Iran have raised concerns over energy supply disruptions and broader regional instability.
Singapore-based United Overseas Bank Ltd. noted the peso was the worst performer among Asian peers on Wednesday, when it fell 0.17 percent. The continued losing streak highlights the challenge for Philippine policymakers as they balance growth-supporting rate cuts with the need to curb capital outflows.
BSP Governor Eli M. Remolona Jr. previously signaled that the central bank is monitoring the exchange rate closely.
While Remolona admitted to feeling pressure to defend the currency, the bank has largely focused on managing volatility rather than targeting a specific level. Ravelas characterized the central bank's intervention efforts so far as effective in preventing a more disorderly retreat.
The peso’s performance remains tethered to the trajectory of the Federal Reserve and the evolution of U.S. foreign policy. As long as external risks persist and the BSP remains on a path toward further easing, the local currency is likely to remain under strain.