Peso sinks to record low of ₱61.888 against US dollar

Abi Sarabia M., Philippine Canadian Inquirer
August 28, 2026

Photo courtesy: Philippine News Agency

MANILA, Philippines — The Philippine peso fell to a new record low against the US dollar on Thursday, August 27, as markets reacted to the Bangko Sentral ng Pilipinas’ (BSP) higher inflation forecast for 2027 amid risks from El Niño and wage increases.

The peso closed at ₱61.888 to $1, weaker than Wednesday’s ₱61.65 finish and extending a period of depreciation that has kept the local currency close to the ₱62 level.

Data from the Bankers Association of the Philippines showed the peso opened at ₱61.71 and traded between ₱61.68 and ₱61.89 during the session. Total trading volume declined to $1.79 billion from $1.901 billion on Wednesday.

A currency trader attributed the peso’s decline partly to expectations of stronger price pressures next year due to the anticipated El Niño phenomenon and the impact of wage hikes.

Following the Monetary Board’s August 27 policy meeting, BSP Assistant Governor Rogelio V. Mercado Jr. said the central bank lowered its inflation forecast for 2026 to 6.1 percent from 6.4 percent. However, its 2027 forecast was raised to 5.4 percent from 4.5 percent.

The peso weakened despite the BSP raising its policy rate by 25 basis points to five percent, its third rate hike this year.

Singapore-based Oversea-Chinese Banking Corp. said the rate increase could provide some support to the peso, but noted that the BSP’s policy guidance would be more important given the challenge of addressing elevated inflation while economic growth weakens.

Rizal Commercial Banking Corp. chief economist Michael Ricafort also noted that the peso depreciated despite the rate hike, which would normally provide support to the local currency.

BSP Governor Eli M. Remolona Jr., meanwhile, said the central bank can only moderate sharp movements in the peso rather than target a specific exchange rate. He cautioned that excessively using the country’s foreign exchange reserves to defend the currency would eventually deplete them.

A trader expects the peso to trade between ₱61.75 and ₱62 against the dollar in the near term.