The Philippine peso weakened to a record low of PHP 59 per dollar in late October, continuing its bearish trend after signals from the central bank that it would tolerate further depreciation. The Bangko Sentral ng Pilipinas said the peso is guided by market forces, intervening mainly to smooth inflation-driven swings rather than curb daily volatility. The remarks suggest the central bank is more willing to let the peso weaken, unlike other Asian economies that have intervened to prop up their currencies. Pressure was further compounded after the BSP’s unexpected interest rate cut in early October and its signal that borrowing costs could be reduced by another 25 bps in December, with additional cuts possible in 2026. Allegations of widespread misuse of billions of dollars intended for flood-control projects have also clouded the Philippines’ growth outlook, further undermining investor confidence.
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