The Philippine peso weakened on Wednesday, matching its all-time low against the US dollar as escalating tensions in the Middle East heightened concerns over inflation risks.
The local currency closed at P61.75 against the greenback on Wednesday, inching down by half a centavo from P61.745 on Tuesday. This was the peso’s worst close in more than two months, with its first record low of P61.75 against the greenback occurring on May 18.
Year to date, the peso has depreciated by P2.96 or 4.79% from its P58.79 finish on December 29, 2025. The Bangko Sentral ng Pilipinas (BSP) intervened in the foreign exchange market to support the peso, selling dollars in the onshore market on Wednesday, according to traders.
The BSP’s actions were aimed at preventing inflationary swings, with Governor Eli M. Remolona, Jr. stating that the central bank does not defend a specific level for the peso. However, the peso remained weak due to net negative dollar outflows in the country, despite recent rate hikes by the BSP.
Likely scenarios for the peso’s movement in the near term include trading between P61.60 and P61.90, according to analysts. Escalating tensions in the Middle East and increasing oil prices have renewed inflationary concerns, which could weigh on the peso and push inflation higher.
Experts anticipate that the peso will remain trading around the P61.75 level in the near term, as long as tensions in the Middle East continue to escalate. A sustained depreciation of the peso could add to inflationary pressures, particularly if accompanied by persistently elevated global oil prices.
Analysts believe that the BSP has enough reserves to defend the peso at its current level, but a total escalation in the war could bring the peso to new lows. In such a scenario, the BSP might consider occasional interventions to anchor the local currency as supported by fundamentals.
