Peso hits new record low as dollar stays strong

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January 8, 2026 | 12:00am

MANILA, Philippines — The peso slumped to another all-time low yesterday as the dollar remained firm and expectations of further domestic rate cuts continued to weigh on the local currency.

Data from the Bankers Association of the Philippines (BAP) showed that the local currency dipped by 14.5 centavos to  close at 59.355 against the dollar from its 59.21 finish on Tuesday.

This is weaker than the close recorded on Dec. 9, when the peso reached a previous record low of 59.22 versus the greenback.

A trader said the peso’s weakness yesterday was “largely a story of firm dollar strength and shifting rate expectations at home.”

The peso’s slide comes as the Bangko Sentral ng Pilipinas (BSP) signaled it is nearing the end of its easing cycle, leaving the door open to a possible final rate cut at the Monetary Board’s February meeting.

“With markets pricing in further BSP easing while US yields stay elevated, carry demand for the peso has weakened,” the trader said.

“Near term, the currency is likely to remain soft and trade around this area, with stability hinging on clearer policy signals and sustained inflows from remittances and tourism.”

BSP Governor Eli Remolona Jr. recently said the central bank is already very close to its desired policy rate level, noting that while another cut remains possible, holding rates steady is also on the table, and a hike is effectively off the table for now.

He said policy moves would continue to be guided by incoming data and risks to the inflation outlook, stressing that the most likely scenarios are either no further cut or just one more reduction.

He added that cutting rates twice more this year would only be warranted if economic conditions turn out to be significantly worse than expected, such as if growth comes in below five percent in 2026.

The BSP has slashed policy rates by a total of 200 basis points since it began its easing cycle in August 2024, bringing the key rate down to 4.50 percent from a peak of 6.50 percent.

Remolona also noted that the peso sliding back to the 59-per-dollar level was due to investors turning cautious after the United States launched a military strike against Venezuela over the weekend.

Still, he said external uncertainties like Venezuela’s political and economic turmoil have only modest effects at present.