The currency spiraled downwards for three days straight, leaving a weakened peso to close at P59 against the dollar on Monday for the third straight day, matching its record low of P59 posted on 3 October.
“The peso’s decrease in value against the dollar came after the latest gross international reserves data which recorded new two-year lows at $95 billion, and net foreign direct investments data posted at new 14-month lows,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp. told Daily Tribune.
“The exchange rate was also lower, after the local stock market declined for the third straight day, by 99.64 points or 1.7 percent, to close at 5,832.58, the lowest in a week and also among two-year lows,” Ricafort added.
Correction hits currency
The peso also became weaker after the recent upward correction of the dollar against major global currencies.
Offsetting factor for the devalued peso is the latest $2-billion global bond sale by the national government, the proceeds of which could be added to the country’s gross international reserves and balance of payments.
“Since the start of 2022, the peso depreciated against the dollar by a total P8 or 15.7 percent (against 50.999 in end-2021); which could jack up, even more, the already high prices of imports and overall hike inflation rates. These, in turn, thereby would increase the possibility of further BSP policy rate hikes — even a surprise/off-cycle local policy rate hike — to help stabilize the peso as well as lower overall inflation,” Ricafort said.