Philippines: Peso drops to new low of P59 vs dollar

THE Philippine peso closed at P59 to a United States dollar on Monday for another record low despite increasing by small increments against greenback in the past three trading days.

Data from the Bankers Association of the Philippines said local foreign exchange trading opened at P58.75, weaker than Friday’s P58.6.

The local currency traded between P58.72 and P59, resulting in a weighted average of P58.877. Besides the peso, a host of foreign currencies are battling the dollar and losing value.

Since the start of 2022, the peso has depreciated by a total of P8.00 or 15.7 percent versus P50.999 by end-2021.

Michael Ricafort, lead economist at Rizal Commercial Banking Corp., told The Manila Times the local currency is weaker after global crude oil prices corrected higher to one-week highs.

“But global crude oil prices nevertheless lingered near 9-month lows or since early January 2022, together with the recent decline in other major global commodity prices that could lead to lower net imports/narrower trade deficits, additional rollback in local fuel pump prices and lower inflationary pressures/overall inflation, going forward,” said Ricafort.

Meanwhile, ING Groep NV and Bank of the Philippine Islands analysts said the peso might fall to an all-time low of P60 to P62 against the dollar as early as this year.

“The peso is feeling the heat,” said Nicholas Mapa, senior economist at ING in Manila.

Mapa said the surging imports boost demand for dollars and lead to elevated trade deficits.

The ING Manila’s senior economist added that the Bangko Sentral ng Pilipinas (BSP) would likely smooth out market volatility.

“But you can’t really do much when the Fed comes in hot and heavy,” he added, referring to the US Federal Reserve.