The PESO weakened On Wednesday to match its entire duration is low against the US dollar as a resurgence in the Middle East the conflict increased anxiety over inflation risks.
The Philippine peso closed at P61.75 against the US dollar on Wednesday, down half a cent from P61.745 on Tuesday, based on data from the Bankers Asso.Philippines website.
This was the peso’s worst close in more than two months. It first closed at a record low of P61.75 against the greenback on May 18.
Year to date, the local unit is down P2.96 or 4.79% from its close of P58.79 on Dec. 29, 2025.
Bloomberg reported that the Philippine central bank intervened in the foreign exchange market to support the peso.
The Bangko Sentral ng Pilipinas (BSP) sold the dollars in the offshore market on Wednesday, said traders familiar with the matter, who asked not to be identified because they are not authorized to speak publicly.
BSP Governor Eli M. Remolona, Jr. he did not respond to a question from Bloomberg confirming the central bank’s dollar sales.
The peso opened Wednesday’s session slightly stronger at P61.73 against the greenback, which was already its best on the day. Its worst showing was its closing price of P61.75, which it touched on Tuesday.
Dollars exchanged rose to $1.269 billion on Wednesday from $752.5 million the previous day.
The dollar-peso closed flat on Wednesday but traded sideways due to a lack of significant developments in the Middle East conflict, the first trader said by telephone, noting “slight pressure from rising crude oil prices.”
“The peso is weak to record lows today as the US steps up its military offensive against Iran,” excerptsaid the seller in a Viber message.
The greenback was generally stronger on Wednesday as rising oil prices raised expectations for a rate hike by the US Federal Reserve as soon as October, Rizal Commercial Banking Corp. Chief economist Michael L. Ricafort in a Viber message, adding that he expects the peso to trade between P61.60 and P61.80.
Reyes Tacandong & Co. Senior Counsel Jonathan L. Ravelas also said in a Viber message that the escalating attacks between the US and Iran and the rise in oil prices caused it. renewed inflation anxiety.
Mr. Ravelas said the local currency may move between the levels of P61.60 and P61.90 in the short term.
“The continued weakness of the peso will certainly weigh on inflation, especially keeping inflation high even if oil prices fall back to pre-war levels due to higher input costs in food imports,” said a second trader in a Viber message.
China economist Domini S. Velasquez said the peso may continue to trade at the P61.75 level in the short term, “without any credible sign that tensions are easing or a resolution is in sight.”
“Based on our estimates, every P1 depreciation of the peso adds about 0.03 percent (ppt) to the currency, which reflects our assumption that about 15% of the CPI (consumer price index) is exported.
Both primary and secondary traders see the peso moving between P61.60 and P61.75 against the greenback on Thursday, with the secondary trader noting a possible recovery due to profit taking.
“The peso will remain weak due to the negative dollar outflow from the country despite the recent rate hike by the BSP,” said a second trader.
The first trader said that the BSP has enough reserves to protect the peso at its current level, but a full increase in the war such as the continued closure of the Strait of Hormuz, another spike in oil prices, and attacks on key regions of Iran. could bring the peso to new levels.
“The BSP may consider intervening from time to time to hold the local currency as it is supported by fundamentals, but the BSP will likely bring the peso in line with any further strengthening of the greenback,” said a second trader.
Mr Remolona previously said the central bank does not protect the peso but only intervenes in the foreign exchange market to prevent inflation. – Aaron Michael C. Sy with Bloomberg
