Peso returns to PHP 57-a-dollar level as market awaits BSP’s policy decision

The peso climbed back to the PHP 57-per-dollar level on Wednesday as the market looked ahead to the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.

The local unit closed at PHP 57.95 versus the greenback, jumping by 15 centavos from its PHP 58.10 finish on Tuesday, Bankers Association of the Philippines data showed.

The peso opened Wednesday’s session weaker at PHP 58.205 versus the dollar. Its intraday best was at PHP 57.93, while its worst showing was at PHP 58.23 against the greenback.

Dollars exchanged jumped to USD 2.03 billion on Wednesday from USD 1.34 billion on Tuesday.

“The pair closed lower on lower-than-expected local unemployment data and bets that the BSP will hold its monetary policy tomorrow, further strengthening the peso,” a trader said in a phone interview.

The Philippines’ unemployment rate dropped to 3.9% in August from 5.3% in July, the Philippine Statistics Authority reported on Wednesday.

The number of jobless Filipinos fell to 2.03 million from 2.59 million in July and 2.07 million a year earlier.

Year to date, the unemployment rate in the Philippines was at 4.1%,

Meanwhile, 10 of the 16 analysts in a BusinessWorld poll expect the central bank to pause at its policy meeting on Thursday (Oct. 9), while the remaining six said a fourth consecutive 25-basis-point (bp) reduction could be made to support growth.

The BSP has lowered benchmark borrowing costs by a cumulative 150 bps since it began its easing cycle in August 2024, bringing the policy rate to 5%. Analysts widely expect another 25-bp cut before yearend following hints from the BSP chief but remain divided over the timing.

The peso was also supported by markets’ anticipation of the seasonal increase in remittances as the holidays draw near, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Thursday, both Mr. Ricafort and the trader see the peso moving between PHP 57.80 and PHP 58.10 per dollar. — A.M.C. Sy