By Aaron Michael C. Sy, Reporter
THE PESO weakened to a fresh all-time low against the US dollar on Wednesday, weighed down by growing expectations of higher interest rates and renewed volatility in global oil prices.
The currency fell by 27.1 centavos to end at P63.361 versus the greenback from its previous record low of P63.09 on Tuesday, Bankers Association of the Philippines data showed.
This marked the peso’s 34th record low this year and its fifth so far in October.
Year to date, the peso has weakened by P4.571 or 7.21% from its P58.79 finish on Dec. 29, 2025.
The local unit opened Wednesday’s session slightly stronger at P63.01 per dollar and hit an intraday best at P63. Its worst showing was at P63.373, which also marked the peso’s weakest level on record, beating its previous P63.23 trough on Oct. 16.
Dollars traded dipped to $1.34 billion from $1.36 billion.
Expectations of further rate hikes by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) kept the dollar elevated against the peso, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.
“The peso reached new lows on market uncertainty ahead of the BSP policy meeting (on Oct. 22),” a first trader said in a Viber message.
Alyssa Nuñez, a former economist at University of Asia and the Pacific and currently working for a private commercial bank, said in a Viber message that the peso could see brief relief, but not a real rebound against the dollar as the BSP’s rate hike has already been priced in.
“At best, it may slow the decline a bit,” she added.
A BusinessWorld poll showed 20 of 22 economists expect the Monetary Board to raise rates by 25 basis points (bps) for a fourth straight time on Thursday, which will bring the policy rate to 5.25%.
This would match the benchmark rate set in June 2025 and will be the highest since the 5.5% in April 2025. Since April, the BSP has hiked benchmark borrowing costs by a cumulative 75 bps.
Meanwhile, the Fed’s next meeting is scheduled for Oct. 27-28.
“The peso weakened significantly to record lows (on Wednesday) on market jitters after reports emerged that the US recently approved a set of diplomatic negotiators to resume talks with Iran, on the background of renewed geopolitical tensions in the Middle Eastern region,” a second trader said in a Viber message.
A third trader said by telephone that the peso declined as the market responded to Brent crude futures crossing $110 a barrel amid lingering tensions in the Middle East and ahead of the BSP’s policy meeting.
The third trader noted there was limited BSP intervention in the foreign exchange market given the recent decline in gross international reserves (GIR).
“We see minor intervention due to limited reserves. But we are hoping the BSP statement (on Thursday) will be supportive of the peso to avoid a strong climb as well as intervention in the market,” the trader said.
The country’s dollar reserves dropped by 8.3% to $99.997 billion in the nine months to September from $109.06 billion a year ago.
This was the lowest GIR level in three years or since the $98.116 billion logged in September 2023 and marked the seventh straight month that the GIR contracted annually.
For Thursday, the third trader said hawkish sentiment from the BSP may support the peso.
The second trader sees the local unit ranging from P63.20 to P63.45 against the dollar, while the third trader expects it to move between P63 and P63.50.