Philippine Peso Hits Record Low Amid Economic Concerns

On October 28, 2025, the Philippine peso fell to a record low of PHP 59.13 against the US dollar, marking a significant decline from its previous close of PHP 58.90. This depreciation surpasses the earlier record of PHP 59 set in December 2024. The Bangko Sentral ng Pilipinas (BSP) attributed this decline to market concerns regarding potential moderation in economic growth, largely influenced by an ongoing infrastructure spending controversy, as well as expectations for further monetary policy easing.

BSP says forex rate is determined by market forces

The BSP has indicated a shift in its approach to currency management, stating that it will allow the exchange rate to be determined by market forces. The central bank emphasized that its interventions are primarily aimed at mitigating inflationary swings rather than preventing daily volatility. In its statements, the BSP noted that the peso remains supported by resilient remittance inflows, robust economic growth, low inflation, and ongoing structural reforms. These factors, including foreign exchange inflows from business process outsourcing, tourism, and overseas Filipino workers, are seen as buffers against external shocks.

Exchange rate to be determined by market forces – BSPPhilippine Peso sinks to all-time low against US DollarPeso drops to historic low as BSP signals tolerance for weaknessBSP says forex rate is determined by market forcesPhilippine Peso Slides to Record Low

The peso's decline has raised alarms among investors, particularly due to allegations of widespread misuse of funds intended for flood-control projects. This controversy has contributed to a negative outlook on the Philippines' economic stability, further undermining investor confidence. The BSP's unexpected interest rate cut in early October, coupled with signals of potential additional cuts, has compounded these concerns. Financial markets are speculating about a possible 25-basis-point cut in December, with further easing anticipated in 2026.

Philippine Peso Slides to Record Low

Critics argue that the BSP's decision to allow the peso to weaken could exacerbate inflationary pressures and lead to increased costs for consumers. The lack of intervention to stabilize the currency contrasts with actions taken by other Asian economies, which have opted to support their currencies amid a strengthening dollar. This divergence in policy raises questions about the long-term implications for the Philippine economy.

Philippine Peso sinks to all-time low against US Dollar

In its official communications, the BSP reiterated its commitment to maintaining robust reserves and managing inflation. "The recent peso depreciation may reflect market concerns over a potential moderation in economic growth due in part to the infrastructure spending controversy," the BSP stated. It also highlighted that the peso's decline is not indicative of a lack of economic fundamentals, as it continues to be supported by various inflows.

Philippine Peso sinks to all-time low against US DollarExchange rate to be determined by market forces – BSPBSP says forex rate is determined by market forcesPeso drops to historic low as BSP signals tolerance for weaknessPhilippine Peso Slides to Record Low

• “The Bangko Sentral ng Pilipinas allows the exchange rate to be determined by market forces,” — Bangko Sentral ng Pilipinas

Exchange rate to be determined by market forces – BSP

• “We continue to maintain robust reserves. When we do participate in the market, it is largely to dampen inflationary swings in the exchange rate over time rather than to prevent day-to-day volatility,” — Bangko Sentral ng Pilipinas

Exchange rate to be determined by market forces – BSP

The recent depreciation of the Philippine peso reflects a complex interplay of market dynamics, economic concerns, and central bank policy, highlighting the challenges faced by the country in navigating its fiscal landscape.

BSP says forex rate is determined by market forces