The peso tumbled to a fresh record low on Friday, March 27, breaching the 60.5-level as geopolitical tensions in the Middle East intensified and the central bank signaled it sees no immediate need to defend the currency.
The peso weakened to ₱60.55 per dollar, surpassing the previous historic low of ₱60.3 set earlier this week, according to data from the Bankers Association of the Philippines. The local currency opened at ₱60.2 before hitting an intraday weak point of ₱60.57, a significant decline from Thursday’s close of ₱60.275.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. maintained a sanguine outlook on the currency’s slide, telling reporters during a virtual briefing after an off-cycle meeting that the current exchange rate does not yet merit intervention.
Remolona noted that the peso’s depreciation remains within a range that supports the country’s export sector and current account without breaching the inflationary thresholds that would trigger central bank action.
This “laissez-faire” strategy, as described by analysts at Nomura, has received the backing of President Ferdinand Marcos Jr. The President indicated that the administration is reluctant to burn through the nation’s gross international reserves to counter external market pressures, calling such efforts "futile.“
The primary catalyst for the Friday selloff was Iran’s rejection of a ceasefire proposal, a development that has heightened fears of a broader conflict in the Middle East.
Jonathan Ravelas, a senior adviser at Reyes Tacandong & Co., said the peso’s high sensitivity to oil shocks is driving the current volatility. He expects the dollar-peso pair to trade within a range of 60.25 to 60.75 in the near term as energy uncertainty persists.
Analysts at MUFG Bank Ltd. identified the peso as one of the most vulnerable emerging market currencies in the face of the deepening U.S.-Israel-Iran hostilities.
Lloyd Chan, a senior currency analyst at the bank, noted that the Philippines’ heavy reliance on imported oil leaves it uniquely exposed to supply disruptions.
Despite the currency pressure, the domestic economic backdrop remains relatively firm. While Oxford Economics noted that the BSP has trimmed its 2026 growth forecast to 4.4 percent from 4.6 percent, the figure represents a recovery from the three percent slump recorded in 2025. That resilience, combined with the central bank’s increased tolerance for a weaker peso, has led some market observers to speculate that a hawkish shift in monetary policy—including a potential interest rate hike—could be on the horizon to stabilize the currency.