THE peso fell yesterday to a new historic low against the greenback amid expectations of another rate hike, while the local stock mart remained in positive territory on bargain hunting.
The local currency weakened by 27.1 centavos on Wednesday to P63.361 from the previous record low of P63.09.
It opened at P63.01 and traded between P63 and P63.373 to a dollar. Traders said there wasn’t enough intervention as the volume declined to P1.341 billion from the previous day’s total of P1.359 billion.
A trader said the peso further weakened amid market uncertainty ahead of the policy meeting scheduled for today.
The Bangko Sentral ng Pilipinas’ (BSP) policymaking body, the Monetary Board, is expected to raise rates by another quarter-point, which will bring the benchmark to 5.25 percent.
The peso has been trading above the P60 level since the Middle East war started in March.
To date, the peso has depreciated by P4.571, or 7.21 percent, from the P58.79 recorded on Dec. 29, 2025.
Bargain hunting
The Philippine Stock Exchange index (PSEi), meanwhile, continued to perform well as bargain hunting supported trading yesterday.
However, analysts said gains were limited by cautious investor sentiment ahead of the BSP’s monetary policy decision.
The benchmark index rose 15.34 points, or 0.26 percent, to close at 5,821.51. However, decliners outnumbered advancers, 18 to nine, reflecting continued investor caution.
“The PSEi continued to rise today,” Japhet Tantiangco, research manager at Philstocks Financial Inc., said, noting that the index’s gain was mainly driven by a 2.38-percent rally in index heavyweight International Container Terminal Services Inc.
Tantiangco said trading remained active, with net value turnover reaching P6.30 billion.
Foreign investors were net buyers, recording net inflows of P503.33 million and helping support the market’s advance.
Luis Limlingan, head of sales at Regina Capital Development Corp., said investors continued bargain hunting, but optimism remained limited as market participants awaited further guidance on the BSP’s policy direction.
Market performance was mixed across sectors, with services leading the gains, rising 1.53 percent, while banking stocks posted the steepest decline, falling 0.61 percent.
Ayala Land Inc. was the index’s top gainer, climbing 3.09 percent to P16.00 per share. PLDT Inc. was the biggest laggard, dropping 4 percent to P1,200 per share.
Inflationary pressures
Philippine Institute for Development Studies (PIDS) senior fellow John Paolo Rivera said the peso’s further depreciation reflects mounting concerns over the country’s external position.
“Continued depreciation could raise import costs and add to inflationary pressures, especially for fuel, food and transportation,” Rivera said.
“While further volatility is possible, greater concern is not the record low itself but prolonged peso weakness that erodes household purchasing power and increases business costs,” he added.
Moreover, another trader said the peso was also weighed down by market jitters following reports that the United States had approved a new group of diplomatic negotiators to resume talks with Iran, amid renewed geopolitical tensions in the Middle East.
“The peso might gain (today) on expectations of a policy response from the BSP meeting,” the trader said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the decline may have been caused by the large net foreign selling at the stock market on Tuesday at $180.5 million when the Mynt/GCash IPO was listed.
He added that the widely expected rate hike “may have already been priced in by the markets beforehand.”
“It is worth noting that the peso exchange rate was relatively stable vs. the US dollar recently amid possible intervention,” Ricafort said, adding that a future BSP rate hike could help stabilize the peso exchange rate.
