By Aaron Michael C. Sy, Reporter
THE PESO sank to another record low against the US dollar on Monday, nearing the P64-per-dollar mark as renewed oil price volatility and growing concerns over stagflation weighed on investor confidence in the Philippines.
The currency slumped by 33.5 centavos to end at P63.95 against the greenback from its previous weakest close of P63.615 on Oct. 23, Bankers Association of the Philippines data showed.
This marked the peso’s 37th record low this year and its sixth so far in October.
Monday was also the sixth straight trading day that the peso ended at an all-time low.
Year to date, the peso has weakened by P5.16 or 8.07% from its P58.79 finish on Dec. 29, 2025.
The local unit opened Monday’s session slightly stronger at P63.535 per dollar and hit an intraday best at P63.5.
Its worst showing for the day was its closing value of P63.95, which also beat the previous intraday record low of P63.62.
Dollars traded rose to $1.649 billion on Monday from $1.285 billion on Friday.
“Higher oil prices over the weekend and US President Donald J. Trump’s remarks on the possibility of renewed military action against Iran strengthened the US dollar, adding to downward pressure on the peso,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.
“However, the peso’s weakness also reflects eroding investor confidence amid growing concerns that the Philippines could face a period of stagflation.”
Dollar demand was also supported by the rise in global crude oil prices after Brent crude peaked at $117 a barrel over the weekend, a trader said by telephone.
Analysts warned that the peso could weaken past the P64-per-dollar level despite the Bangko Sentral ng Pilipinas’ (BSP) jumbo rate hike last week and its hawkish stance, as persistent pressures on the country’s balance of payments (BoP) continue to weigh on the local currency.
The country posted a BoP deficit of $3.144 billion in September, significantly wider than the $596-million gap recorded in August and a reversal of the $82-million surplus a year ago.
This marked the third month in a row that the BoP position settled at a deficit, marking the largest monthly shortfall in nearly two years or since the $4.078 billion in January 2025.
“While monetary tightening can help stabilize expectations and moderate depreciation, it cannot fully offset these pressures. Concern is not simply reaching P64 but the inflationary consequences of sustained peso weakness,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera also said in a Viber message.
At its Oct. 22 meeting, the BSP delivered a surprise 50-basis-point rate hike, bringing its benchmark rate to a nearly two-year high of 5.5%.
The BSP had said the “decisive” move was necessary to address broadening price pressures and keep inflation expectations anchored amid further upside risks, especially with the strong El Niño looming in the next few months.
BSP Governor Eli M. Remolona, Jr. also said further hikes are possible as they see inflation staying red-hot until next year.
“Notably, the peso has continued to test record lows despite the BSP’s rate hikes in August and October, suggesting that higher interest rates alone may not be enough to support the currency. The peso’s trajectory over the past few days suggests that the USD-PHP exchange rate could breach the P64 level in the near term if current pressures persist,” Ms. Velasquez said.
Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message that the peso could reach as low as P65 per dollar as geopolitical risks will keep the dollar-peso vulnerable unless issues surrounding food security, transport, and electricity are addressed.
Meanwhile, the trader said the US Federal Reserve’s policy meeting may cap the peso depreciation and recover its losses as US policymakers are expected to keep rates on hold. However, the market will be looking for clues on the likelihood of a December hike.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the peso may also gain support from the seasonal increase in remittances in the fourth quarter.
For the rest of the week, the trader said the foreign exchange market will mostly be focused on the Fed’s policy meeting but will also be guided by US jobs data and local trade data.
The trader sees the peso ranging from P63.70 to P64.20 against the dollar on Tuesday, while Mr. Ricafort expects it to move between P63.85 and P64.05.