Peso hits new record low on October 19

MANILA — The Philippine peso again fell to a record low against the US dollar on Monday, October 19.

The peso fell to P63.09 versus the dollar. It previously hit a record low of P63.06 against the greenback.

A weaker peso is expected to make oil purchases even more expensive as the commodity is purchased with dollars. It is also expected to stoke inflation.

The depreciation is also expected to impact the country’s sovereign debt, of which a third is owed to foreign creditors.

A stronger dollar may initially benefit families of overseas Filipino workers, as they can get more pesos for every dollar sent. But inflation may also eat into their purchasing power.

Prior to the US and Israel attack on Iran at the end of February, the peso was on a winning streak, clawing back to P57.665 on February 27, which was the last trading day for the month. 

Analysts say the peso and other currencies were affected by news of hotter-than-expected US inflation, which fueled expectations that the US Federal Reserve would hike rates again, which would make the dollar even stronger. 

The continuous slide of the Philippine peso past 63 against the US dollar has heightened expectations of further monetary tightening by the Bangko Sentral ng Pilipinas, with rate hikes anticipated next week and in December.