Philippine Peso Closes at 63.95 per Dollar, Sets 32nd Record Low This Year
Key Facts
The Philippine peso closed at 63.95 per dollar on October 26, just five centavos short of 64, a new record low for the currency. Philstar reported that this was the 32nd time this year the peso had ended trading at a record low. The currency opened the session at 63.535 per dollar before reversing course during trading. It ended the day 33.5 centavos weaker than Friday’s close of 63.615, which was then a record low. The decline shows continued pressure on the peso despite the monetary tightening announced by the central bank days earlier.
On October 22, the Bangko Sentral ng Pilipinas raised its target reverse repurchase rate by 50 basis points to 5.50%. The bank also adjusted the overnight deposit facility rate to 5.00% and the overnight lending facility rate to 6.00%. It said the adjustment would tighten monetary conditions, help contain the second-round effects of inflation and anchor inflation expectations. The Monetary Board said it saw the need for a strong response as price pressures broadened and the risks of higher inflation increased. The bank added that it stood ready to take further monetary action if needed, without committing to a specific exchange-rate level.
The rate decision came as headline inflation accelerated to 7.2% in September from 6.1% in August, according to the Philippine Statistics Authority. Average inflation from January to September was 5.4%, reflecting broader price pressures during the year. Annual transport inflation accelerated to 14.6% in September, compared with 13.5% in the previous month. The central bank said higher transport fares showed that upside inflation risks were materializing. It also said El Niño conditions continued to threaten agricultural output and prices, keeping pressure on the cost of living.
The central bank linked some price risks to Middle East tensions, saying they had pushed global oil prices higher. This makes the Philippine economy more sensitive to currency weakness because fuel is imported and priced in dollars. The bank said a weaker peso raises the cost of these imports for consumers and adds to pressure on the overall price level and inflation. It may also increase the peso value of servicing foreign-currency-denominated obligations. The Philippines’ external debt stood at $154.9 billion in the second quarter of 2026, making the exchange rate’s effect on the cost of those obligations a matter of direct economic importance.
The central bank governor said the institution’s intervention in the foreign-exchange market was aimed primarily at limiting volatility that could be inflationary. He added: "We intervene a little in the foreign-exchange market, but that is mainly aimed at avoiding exchange-rate volatility that tends to feed inflation." The statement sets out the purpose of intervention as described by the governor: curbing currency fluctuations that affect prices. In its projections, the bank said average headline inflation would remain elevated in 2027. But it expects inflation to approach its 3.0% target in 2028, a path that reflects the continuing price challenge ahead.
The Monetary Board’s next meeting is scheduled for December 17, 2026, according to the central bank’s official calendar. The meeting will follow October’s decision to raise the policy rate by 50 basis points and the bank’s reaffirmation that it is ready to take further steps if inflation risks warrant them. Inflation data, import costs and external debt service put the exchange rate among the issues facing policymakers. The bank also tied its foreign-exchange intervention to avoiding inflationary volatility, rather than fixing a particular rate. Future rate decisions will remain guided by the board’s assessment of price pressures and their risks, according to its stated guidance.