Peso climbs to 57:$1 level
The Philippine peso posted its strongest close in more than four months on Monday, climbing to the 57-per-dollar level in thin holiday trading across Asia, though the rally may be hard to sustain without fresh positive catalysts at home.
The peso ended the first trading day of the week at 57.986 against the greenback, 3.4-centavos stronger than its previous finish.
Data showed this was the local unit’s best closing since Oct. 8 last year, when it ended at 57.95.
Trading volume was thin at $896.5 million, down from the preceding session’s $1.3 billion.
A trader said yesterday’s close was still within a narrow range as Asian foreign exchange markets were quiet. Markets in the United States, China, Taiwan, Indonesia and South Korea were closed for holidays.
“The peso has been slightly firmer off last week’s highs,” the trader said. “But without fresh macro catalysts, the move feels more like range-bound consolidation than breakout, and traders are watching US data and Bangko Sentral guidance for any shift in momentum.”
Indeed, markets will focus on the Bangko Sentral ng Pilipinas’ (BSP) next policy move amid a widening graft scandal that has weighed on the economy.
All 13 economists polled by the Inquirer last week expect the central bank’s Monetary Board to lower the benchmark overnight borrowing rate by 0.25 percentage point to 4.25 percent at its first policy meeting of 2026 on Feb. 19, a move that would further ease borrowing costs to support the economy.
If realized, the cut would bring cumulative reductions since the easing cycle began in August 2024 to 2.25 percentage points.
Meanwhile, new data released last week showing inflation stateside turned out better than expected fueled expectations of rate cuts by the US Federal Reserve later this year, keeping the dollar steady.
That, in turn, could help ease some pressure on the peso should the BSP decide to further lower local borrowing costs.
The BSP had said it would let market forces largely determine the exchange rate, adding it would step in only if a prolonged slide threatens imported inflation as opposed to smoothening daily swings.
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