PRESIDENT Ferdinand Marcos Jr. on Wednesday urged the public not to panic after the peso touched another record low of P64.18 on early trading.
“Do not take it with alarm. Don’t panic,” Marcos said in an interview.
The president cited the rising cost of fuel caused by the ongoing conflict in the Middle East as the primary factor in the peso hitting another all-time low.
The peso, while strengthened on Wednesday, remained above the P64:$1 level.
It closed slightly higher by 14-and-a-half centavos to P64.025 from the previous record low of P64.17. It opened at P64.08 and traded between P63.94 and P64.18. The volume reached P1.662 billion, down from the previous day’s total of P1.726 billion.
Yesterday was the first time the local currency closed higher after hitting record-low levels consecutively for the past six days.
The Philippine stock market, meanwhile, gave back most of its previous session’s gains as concerns over inflation, a weakening peso and elevated oil prices renewed pressure on local equities.
Ready to defend the peso
Despite the external factors pushing the currency downward, the president reassured the public that the administration is taking active measures to mitigate further depreciation.
He emphasized that the country’s strong economy helps protect it from the volatility of the global market.
“People can take solace in the fact that our policy towards the peso is to continue to defend the peso as hard as we possibly can,” he said, assuring the public that the government has “all the tools” to defend the local currency.
Marcos highlighted the Bangko Sentral ng Pilipinas’ (BSP) healthy gross international reserves as the primary instrument for supporting the local unit in the foreign exchange market.
"Our foreign exchange reserves are healthy, and that is how we can defend the peso. So we will continue to defend the peso," he added.
Marcos further pointed out that current inflationary momentum is fundamentally driven by supply-side constraints and vowed direct executive intervention in domestic sectors, specifically regarding food supply chains.
"Again, we are looking at many of the different because the inflation is coming from the supply side. It's a supply-side inflation. So, monetary measures can only go so far," the president explained.
"We have to do others, other ways. So, it's basically, oil we can do nothing about. Food we can. And we are doing, again, everything that we can to make sure that the prices of food come down," he added.
Acknowledging the dual pressure of a stronger US dollar — coupled with the Middle East conflict — Marcos affirmed that the government remains focused on stabilizing food prices and managing inflationary spillover.
"The dollar is also becoming very strong. But nevertheless, we have the means, as I say," Marcos noted, reiterating that the administration will continue utilizing monetary and fiscal interventions to cushion the impact on Filipino consumers.
Help reassure markets
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the president’s message “would help to reassure the markets.”
“(It is) clear signalling as well," Ricafort said.
He added that the peso also gained as crude oil prices eased to $115 per barrel from $116 on the previous trading day.
“The decline came as increased diplomatic efforts raised hopes of preventing a wider escalation of the US-Iran war,” Ricafort said.
He said the peso could range at P63.90 to P64.10 levels on Thursday.
A trader said that the peso strengthened “due to profit taking and following remarks from President Marcos showing their readiness to defend the peso.”
“Hawkish fed may encourage sellers to test immediate support at 63.80, while signals that the Fed may further hike rates may push the dollar to test resistance at P64.30,” the trader added.
SMIC economist Robert Dan Roces said the key concern is whether sustained peso depreciation adds to “inflationary pressures, weakens purchasing power and weighs on economic growth.”
“The broader impact will depend on how these pressures evolve and how effectively the economy absorbs them,” Roces said.
Persistent weakness
The Philippine Stock Exchange index (PSEi) shed 107.64 points, or 1.87 percent, to close at 5,653.55, reversing most of Tuesday’s 120.01-point rally. The broader All Shares index likewise declined 0.97 percent.
Japhet Tantiangco, research manager at Philstocks Financial Inc., attributed the decline to inflation concerns following higher global oil prices after renewed Houthi attacks on a Saudi Arabian refinery, alongside the peso’s persistent weakness around the P64-per-dollar level.
“Elevated long-term Treasury yields also made equities less attractive,” Tantiangco said.
Head of sales at Regina Capital Development Corp. Luis Limlingan said investors took profits following Tuesday’s gains, while continued sharp depreciation of the peso encouraged market participants to maintain cautious positions.
The peso’s weakness has heightened concerns over higher import costs and inflation, potentially prompting further interest rate increases by the BSP following its 50-basis-point hike last week.
Brent crude traded around $116 per barrel, remaining elevated amid concerns over a possible renewed escalation in the conflict involving the United States and Iran. However, diplomatic efforts to ease tensions in the Persian Gulf offered some relief to global markets.
Further rate hikes
Ricafort said persistent currency weakness and elevated oil prices could increase importation costs and inflation, potentially raising the likelihood of further BSP rate hikes and higher borrowing costs for listed companies.
He also cited the recent affirmation of the Philippines’ credit ratings by international agencies and the planned inclusion of Philippine bonds in JPMorgan Chase & Co.’s local debt benchmarks next year as potential sources of support for foreign investment.
Market losses were broad-based, with only the mining sector advancing, gaining 0.41 percent. Services posted the steepest decline, falling 2.95 percent.
Monde Nissin Corp. was the index’s top gainer, rising 3.33 percent, while Bank of the Philippine Islands was the biggest laggard, dropping 5.05 percent.
Trading turnover reached P6.97 billion, net of extraordinary block sales. Decliners outnumbered advancers, with 105 stocks falling, 70 rising and 68 unchanged.
Ricafort identified the 5,600 level as the market’s initial support, with the November 2025 low of 5,584.35 serving as a further reference point if selling pressure persists.
