Photo illustration of US dollar to PH peso exchange in this photo taken on September 30, 2022. Gigie Cruz, ABS-CBN News
MANILA – The Philippine peso weakened to yet another historic low versus the US dollar on Friday.
According to the website of the Bankers Association of the Philippines, the peso closed at P62.68 to $1 at the end of Friday’s trading. The peso even weakened to as low as P62.775 during intraday trading.
This was lower than the previous record, which was P62.625 on Sept. 8 this year.
A weaker peso is expected to make oil purchases even more expensive as the commodity is purchased with dollars. The depreciation is also expected to impact the country’s sovereign debt, of which a third is owed to foreign creditors.
Since the outbreak of the Middle East war, the peso has depreciated sharply versus the dollar. Prior to the attack by the US and Israel against Iran at the end of February, the peso was on a winning streak, clawing back to P57.53 on Feb. 23. Since then, the peso has been on a losing streak.
Jasper Ondap, Equity Analyst at Regina Capital, said the peso depreciation raises uncertainty for businesses and consumers. In an interview with ANC, he said that while consumption proved surprisingly robust in the months following the Middle East war, business would continue to be "tough"
"Earnings should be, I think it's tough at this point because when you look at the current oil prices now, it's back to $100 per barrel, and you know in the past few months it corrected to what, 70 below 80, and then 90, and it's now back to a 100. So another shift probably will happen," Ondap said.
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The Bangko Sentral ng Pilipinas has said that it is closely watching the exchange rate movements and how this may impact inflation. In its last policy-setting meeting, the BSP again raised interest rates, saying that inflation remained high.