Peso slides to record low PHP 59.44 per USD

The Philippine peso slid to a record low of PHP 59.44 a dollar at Wednesday’s close, failing to sustain support seen late last year due to renewed demand for the greenback amid heightened geopolitical tensions.

The local currency weakened by 9.9 centavos from Tuesday’s 59.341 finish, according to Bankers Association of the Philippines data posted on its website. The close broke the previous record low of PHP 59.355 on Jan. 7.

The peso opened Wednesday’s trading session weaker at PHP 59.38 versus the dollar. Its intraday best was at PHP 59.35, while its worst showing was at PHP 59.45 against the greenback.

Dollars traded inched down to USD 951 million on Wednesday from USD 999.2 million on Tuesday.

Demand for the greenback persisted on Wednesday amid geopolitical concerns arising from the tariffs imposed by US President Donald J. Trump against Iran and its trading partners, a trader said by telephone.

The trader also cited increasing bets of fewer rate cuts by the US Federal Reserve this year.

This as the Trump administration threatened Fed Chair Jerome H. Powell with criminal indictment over his testimony before the US Senate regarding the renovation of the Fed’s headquarters in Washington, D.C.

The peso was also dragged by the local government’s reduction of its infrastructure spending target for the year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Department of Budget and Management cut its infrastructure spending target to 4.3% of gross domestic product (GDP) this year from 5.1% previously following weaker government spending and economic growth last year due to the flood control scandal.

The lower target translates to about PHP 1.3 trillion in infrastructure outlays, Acting Budget Secretary Rolando U. Toledo said on Tuesday.

Mr. Ricafort noted that the peso moved within familiar ranges on Wednesday, signaling possible interventions from the central bank.

“So far, the signals have been consistent that [the Bangko Sentral ng Pilipinas (BSP) has] been on intervention in recent months and at least for more than three years already. So, these are familiar levels because the previous record high for more than three years was PHP 59,” he told Money Talks with Cathy Yang on One News on Wednesday. 

AIA Investment Management Philippines Chief Executive Officer Angie L. Pacis said in the same program that the peso could test the P62 level due to growing interest rate differentials between the Philippines and the US.

“We’re actually of the camp that, for now, based on what we see, maybe the rate cut in February is actually iffy, simply because the BSP is already within their 2-4% [inflation] target range,” she said.

BSP Governor Eli M. Remolona, Jr. said last week that a rate cut at the Monetary Board’s Feb. 19 meeting “remains on the table” but was “unlikely.” He also noted that the BSP is nearing the end of their easing cycle.

The Monetary Board has delivered 200 basis points in reductions since August 2024, bringing the policy rate to an over three-year low of 4.5%.

For Thursday, the trader said the market players will await developments with Mr. Trump’s subpoenas against Mr. Powell.

The peso could also be weighed by US producer inflation data which are expected to remain high and could further fuel hawkish Fed expectations, the trader added. The data will be released overnight.

The trader sees the peso moving between PHP 59.20 and PHP 59.60 per dollar on Thursday, while Mr. Ricafort expects it to range from PHP 59.35 to PHP 59.55. — Aaron Michael C. Sy, Reporter