The Philippine peso experienced another decline against the US dollar on Thursday, closing at P58.945. This latest drop comes amidst growing concerns over the nation’s economic performance and a lingering shadow of scandal.
Trading began with a slight weakness, but quickly deteriorated as news surfaced regarding the country’s economic output. The peso’s intraday range stretched from P58.75 to a low of P58.95, reflecting increasing market anxiety.
A key factor driving the peso’s fall was the announcement that the Philippines’ gross domestic product (GDP) growth had fallen short of government targets for the third year running. This underperformance is directly linked to a corruption scandal involving crucial government infrastructure projects.
The latest GDP figures revealed a significant slowdown, with growth reaching only 3% in the fourth quarter. This marks the slowest pace in nearly five years, a figure not seen since the economic fallout of the early pandemic days.
Full-year GDP growth for 2025 registered at 4.4%, a considerable distance from the government’s projected 5.5%-6.5%. This represents the weakest annual expansion since 2011, excluding the severe contraction experienced during the height of the pandemic.
Government officials have pointed to constrained public spending and a decline in investor confidence as primary contributors to the economic slowdown. The ongoing corruption investigation continues to cast a long shadow over investment decisions.
Adding to the peso’s woes, statements from US Federal Reserve Chair Jerome Powell signaled a cautious approach to interest rate reductions. Powell indicated a robust US economy and diminishing inflation risks, suggesting borrowing costs may remain elevated for an extended period.
Despite the current downturn, some analysts predict a potential rebound for the peso on Friday. Expectations are centered around a forthcoming US producer inflation report that is anticipated to show softening prices.
Traders forecast the peso to fluctuate between P58.85 and P59.10 against the dollar on Friday, a narrow range reflecting continued uncertainty and sensitivity to global economic signals.
