05.11.202503:29:39UTC+00Philippine Peso Slips on Tepid Inflation

The Philippine peso has depreciated to approximately PHP 58.8 per dollar, influenced by subdued inflation levels that could pave the way for further interest rate cuts. Annual inflation registered at 1.7% in October, slightly below the anticipated 1.8%, and comfortably within the central bank’s target range of 2%–4%. Core inflation also declined slightly to 2.5% from 2.6%, bolstering the rationale for additional interest rate reductions by the Bangko Sentral ng Pilipinas (BSP) following an unexpected cut earlier in October. The central bank has indicated the possibility of another 25 basis point decrease in borrowing costs come December. Simultaneously, the US dollar has strengthened as expectations for further monetary easing in the US have diminished, further pressuring the peso. Recently, Governor Eli Remolona addressed market concerns by downplaying rumors that the central bank targets specific exchange rates; the BSP emphasized that the peso’s value is primarily influenced by market dynamics, a factor that had previously contributed to its record lows in October. Looking forward, year-end remittances are anticipated to bolster the peso, potentially leading to its appreciation by December.