Peso sinks back to historic P59:$1 level

The Philippine peso depreciated against the US dollar for the third straight trading day on Thursday to close at the P59:$1 level, matching the worst showing of the local currency posted two years ago, amid the greenback rally.

The local unit closed at P59:$1, the record-low hit on October 3, as it depreciated by 9 centavos from Wednesday’s finish of P58.91:$1.

Thursday’s depreciation comes as the US dollar strengthened against most global currencies to linger among one-year highs with Treasury yields hitting among 4.5-month highs, and the 10-year US government bond yields at 4.39%.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort also attributed Thursday’s movement to geopolitical risks after Ukraine carried out its first strike on Russia with US-supplied missiles.

“The markets also anticipate the seasonal increase and conversion to pesos for OFW (overseas Filipino workers) remittances to finance holiday- or Christmas-related spending next month,” he said in a mobile message.

Moving forward, Ricafort said the depreciation could be offset by the easing of global crude oil prices which are now close to three-year lows, and support keeping inflation within the central bank’s 2% to 4% target. It was recorded at 2.3% in October.

The Bangko Sentral ng Pilipinas (BSP) earlier this week said it is monitoring the movement of peso against the dollar, but it does not worry much about the depreciation, as it lets the market dictate the movement.

“We don’t worry so much about whether the peso depreciates. We worry about the pass-through effect, pero ngayon medyo okay pa naman (but for now, it’s still okay),” BSP governor Eli Remolona Jr. said Tuesday.

“If it depreciates very sharply, then we talk. Kung hindi naman (If not) very sharply, it doesn’t become inflationary. It’s inflationary kung medyo (if it’s a bit) sharp at tsaka tuloy-tuloy (and continuous). Hindi kami nakikialam dun sa (we do not intervene on the) day to day movements,” he added.

Remolona also reiterated that the central bank is still on its easing cycle, adding that it can cut by 25 basis points in the policy meeting scheduled on December 16, 2024, or the next one.

Local equities likewise closed in the red, with the stock barometer PSEi down by 112.62 points or 1.61% to 6,863.01 at the closing bell. The broader All Shares index shed 38.02 points or 0.99% to end at 3,809.39.

More than 1.373 billion shares, valued at P5.635 billion, changed hands. Decliners trumped advancers, 111 to 86, while 57 issues were unchanged.

“Philippine shares finally succumbed to profit taking after successive sessions in the green… Local shares were sold on news after the reassurances from the BSP,” Regina Capital Development Corp. head of sales Luis Limlingan said in a separate text message.—RF, GMA Integrated News