THE Philippine peso weakened further on Wednesday, hitting a new historic low against the US dollar as market sentiment was weighed down by expectations of potential monetary easing by the Bangko Sentral ng Pilipinas (BSP).
The local currency closed at P59.355:$1, a decrease of 14.5 centavos from the previous day’s close of P59.21:$1. This also surpassed the previous record low of P59.22:$1 recorded on December 9.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed the peso’s decline to “dovish signals recently on possible -0.25 BSP rate cut on the table in February 2026 that could narrow the interest differential with the US central bank/Federal Reserve.”
Ricafort also pointed to the country’s rising national government debt and recent unemployment data, which, despite easing, remains elevated due to weather-related disruptions, as contributing factors to the peso’s weakness.
“On external developments, the US dollar/peso also higher after the gauge of the US dollar versus major global currencies went up to near one-month highs, slightly higher since the US invasion of Venezuela since January 3, 2026 amid the shift to safe havens such as gold and the US dollar in some countries, until the dust settles,” he added.
Ricafort noted that potential positive developments that could support the peso include “some progress on judicial process related to the anomalous/controversial flood-control infrastructure projects in terms of arrests, cases filed, assets freeze, among other actions taken by local authorities.”
