Philippine peso hits record low against US dollar

The Philippine peso has reached new record lows against the US dollar, closing at approximately 62.59 to 62.71 per greenback. This downward trajectory follows a loss of roughly 6 percent of its value since the start of the year.

Several factors are driving the currency's decline. Externally, a strong US dollar and elevated US Treasury yields have encouraged investors to move capital toward safer dollar-denominated assets. Geopolitical tensions, specifically regarding oil supply disruptions and rising energy prices, have also increased the demand for US dollars as importers convert more local currency to purchase dollar-priced crude.

Domestically, political uncertainty and persistent core inflation contribute to market volatility. While headline inflation eased to 6.1 percent in August, experts suggest the Bangko Sentral ng Pilipinas may maintain a bias toward higher interest rates to combat stubborn price pressures and inflation expectations, which are not expected to return to target ranges sustainably before 2028.