Peso falls to new low of P59.22 vs $1

THE PESO sank to a new all-time low on Tuesday to join most regional currencies’ decline against the US dollar on cautiousness before the US Federal Reserve’s policy meeting, with bets on a rate cut by the Bangko Sentral ng Pilipinas (BSP) also affecting sentiment.

The local unit slid by 28.5 centavos to close at P59.22 versus the greenback from its P58.935 finish on Friday, Bankers Association of the Philippines data showed.

This was a fresh low for the peso, beating the previous record of P59.17 logged on Nov. 12.

Year to date, the local currency has depreciated by P1.375 or 2.32% from its P57.845 finish on Dec. 27, 2024.

The peso opened Tuesday’s session weaker at P59.08 versus the dollar. Its intraday best was at P59.07, while its worst showing was its closing level of P59.22 against the greenback.

Dollars traded went down to $1.097 billion on Tuesday from $1.423 billion on Friday.

The peso dropped along with its regional peers as the dollar was stronger overnight on higher US Treasury yields as markets await the Fed’s policy decision, the first trader said in a Viber message.

The US central bank was set to begin its two-day policy meeting overnight, where it is widely expected to lower borrowing costs by 25 basis points (bps) for a second straight time.

While a cut this week is already priced in, markets are unsure about the Fed’s future policy moves, especially with Chair Jerome H. Powell set to end his term by May next year and with the latest data showing a mixed picture of the state of the US economy.

The dollar was stronger against most Asian currencies amid escalating tensions between China and Japan, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

“The peso weakened anew past the P59 level as market expectations firmed over a potential BSP rate cut this week,” the second trader said in an e-mail.

A BusinessWorld poll showed that 17 of 18 analysts expect the BSP to deliver a fifth straight 25-bp reduction at their meeting on Thursday to bring the policy rate to 4.5%, its lowest since September 2022.

Meanwhile, one analyst said the Monetary Board could announce a jumbo 50-bp cut.

The Philippine central bank has cut benchmark rates by a total of 175 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said last week that weakening growth prospects raise the odds of a cut on Thursday. He earlier said that they could extend their rate cut cycle until next year to help provide economic stimulus as corruption concerns have caused a slowdown in public spending and also dampened consumer and investor confidence.

“The peso’s slide to a record low reflects two forces: a strong US dollar and weak local confidence. For Filipinos, it’s a mixed bag — remittances gain, but imports and debt cost more,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message.

“The key now is policy clarity and attracting inflows like tourism and exports. The BSP can step in, but lasting stability needs more than intervention — it needs trust and growth.”

For Wednesday, the second trader said the peso could move between P59.10 and P59.35 per dollar, while Mr. Ricafort sees it ranging from P59.05 to P59.30. — Aaron Michael C. Sy