The Philippine peso weakened beyond 62 per US dollar on Friday, setting a new record low, as persistent concerns over the country’s inflation outlook kept the currency under pressure. This slide came despite the Bangko Sentral ng Pilipinas (BSP) delivering a third consecutive 25-basis-point rate hike, bringing the policy rate to 5% in what officials described as a preemptive move.
The BSP raised its 2027 inflation forecast to 5.4% from 4.5%, citing upside risks from severe El Niño conditions and higher minimum wages. At the same time, it lowered its 2026 forecast to 6.1%, reflecting some relief from easing global oil prices. However, elevated oil prices remain a key vulnerability for the peso, as the Philippines imports nearly all of its oil requirements, a dynamic that could further widen the current-account deficit and intensify domestic inflationary pressures.
Governor Eli Remolona reiterated that the central bank’s priority would be to smooth excessive volatility in the foreign-exchange market rather than defend any particular exchange-rate level. The peso has now fallen more than 5% against the dollar since the start of the year, placing it among the weakest-performing currencies in Asia.
