Peso crosses 60:$1 territory

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March 20, 2026 | 12:00am

BSP: No defense, only smoothing of volatility

MANILA, Philippines —  The peso plunged past the key 60-per-dollar level for the first time in history yesterday, closing at a new record low as strong dollar demand, elevated oil prices and geopolitical tensions continued to weigh on the local currency.

Data from the Bankers Association of the Philippines showed the peso closed at 60.10 per dollar yesterday, weaker by 58 centavos than Wednesday’s 59.52 finish. This surpassed the peso’s previous record low of 59.87 posted on March 16.

The local currency opened at 59.90, which was also its strongest level yesterday. During the session, the peso weakened to as much as 60.40 versus the greenback, marking its weakest intraday level on record.

A trader said the peso remains under pressure despite the US Federal Reserve holding rates steady, as signals of a prolonged tight policy stance continue to support the dollar.

“Even with the Fed on hold, the signal remains higher-for-longer, keeping US yields elevated and the dollar firm. Combined with high oil prices and geopolitical risks, this continues to pressure the peso, with any recovery likely gradual and dependent on a clearer shift in US policy and softer oil,” the trader said.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the latest move reflected market reaction to escalating tensions in the Middle East.

“If this escalates, we could see the peso staying above the 60-per-dollar level,” Ravelas said.

In a statement late Wednesday, the Bangko Sentral ng Pilipinas (BSP) said it does not target any specific exchange rate level, stressing that its interventions in the foreign exchange market are limited to smoothing excessive volatility rather than defending the peso.

“The BSP stresses that it operates in the foreign exchange market to smooth excess volatility and maintain orderly conditions. This is consistent with a flexible exchange rate policy, with intervention limited to tempering large swings that could affect inflation rather than defending any specific level,” it said.

Ahead of its April 23 policy meeting, the BSP said it is closely monitoring the impact of the Middle East conflict on inflation, particularly through higher oil prices that could affect transport costs, fertilizer prices and broader consumer prices.

It is also assessing potential spillovers to the country’s external position, including remittances, trade and overall current account dynamics.

“As always, policy will be driven by data,” the BSP said.

Economists said the Philippines remains vulnerable to prolonged energy price shocks, which could eventually force tighter monetary policy if pressures persist.

According to Capital Economics, the Philippines is among emerging markets that may not respond immediately but could be pushed to raise interest rates if elevated oil prices are sustained.

The think tank added that the country’s reliance on imported energy could worsen its external balance. “In the Philippines, heavy reliance on imported energy could push the current account deficit deeper into negative territory,” it said.

This combination of external pressures and currency weakness could narrow the BSP’s room to stay accommodative, especially if inflation risks begin to intensify.