Peso hits new record low vs. dollar on strong US rates outlook, oil prices

The Philippine peso depreciated further against the US dollar on Tuesday to hit a new all-time low, its 23rd record-low close so far this year, as the greenback strengthened amid expectations of elevated US interest rates. The local currency shed 3.9 centavos to close at P62.625:$1 from Monday’s finish of P62.586:$1, surpassing the previous record low of P62.59:$1 recorded last Friday, September 4, 2026. “The peso’s slide to a new record low of 62.625 is largely a reflection of a stronger US dollar rather than a sign of economic weakness in the Philippines. Geopolitical and climate hazards pose upside risks,” Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said in a mobile message. “Markets are currently favoring dollar assets amid expectations of elevated US interest rates, while higher global oil prices are increasing the country’s import bill and demand for dollars,” he added. The US Federal Reserve is expected to keep interest rates elevated for longer, as inflation remains sticky and economic activity continues to hold up, boosting demand for dollar-denominated assets. Rizal Commercial Banking Corp. chief economist Michael Ricafort also attributed Tuesday’s peso weakness to higher global crude oil prices, which continue to hover near three-month highs amid tensions in the Middle East. “It is worth noting that the peso exchange rate was relatively stable vs. the US dollar recently amid possible intervention/smoothening of market volatility at 61.60-62.60 levels/range highs,” he said in a separate mobile message. Tuesday’s close marked the 23rd time this year that the peso set a new record low, with the first recorded on January 7 at P59.355:$1. Local equities, meanwhile, closed higher on Tuesday as investors bought on the dip. The main Philippine Stock Exchange index (PSEi) gained 22.31 points, or 0.37%, to 6,105.99. The broader All Shares index rose 5.62 points, or 0.17%, to 3,384.57. “The local index closed higher as market participants engaged in bargain hunting, taking advantage of lower valuations following yesterday’s decline,” Regina Capital Development Corp. head of sales Luis Limlingan said in a separate message. “However, investor caution remained evident as trading volume stayed subdued amid persistent macroeconomic and geopolitical uncertainties. Overall, market sentiment remained measured despite the recovery in the index,” he added. More than 558.775 million shares, valued at P4.388 billion, changed hands. Decliners led advancers, 102 to 89, while 71 issues were unchanged.— MCG, GMA News