GROWING expectations of a Federal Reserve rate hike combined with higher oil prices amid renewed tensions in the Middle East put further pressure on the Philippine peso, which fell to a new all-time low of P62.4 against the dollar on Tuesday.
Analysts said this after the Philippine peso weakened for the third straight trading day-falling further to a P62.4-per-dollar finish on Tuesday.
The rate is 13.5 centavos weaker than its finish of P62.265 against the greenback on Friday, data from the Bankers Association of the Philippines (BAP) showed.
Jonathan L. Ravelas, senior advisor at Reyes Tacandong and Co., said the USD/PHP weakened to 62.40 against the green back ‘as safe-haven demand lifted the greenback amid renewed Middle East tensions and ahead of Fed Chair Warsh’s Jackson Hole remarks.’
Ravelas’s sentiment was echoed by Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UBP), who further explained what has been fueling the strength of the US dollar environment.
According to Asuncion, the greenback’s strength has been driven by ‘rising US Treasury yields, growing expectations of a Federal Reserve rate hike, and higher oil prices amid escalating geopolitical tensions in the Middle East.’
‘These developments have encouraged investors to shift toward dollar assets while increasing inflation and import cost concerns for oil-importing economies such as the Philippines,’ added Asuncion.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC) explained that the weakening of the peso for the third straight trading day may be pointed to the latest ‘hawkish signal by Fed Chair Kevin Warsh during the yearly Jackson Hole Symposium on August 28,2026.’
Ricafort noted that the signal ‘resulted in a higher gauge of US dollar versus major global currencies.’
Looking ahead, Ravelas said the peso is likely to remain under pressure and trade within the 62.25 to 62.50 range in the near term.
Asuncion concurred with Ravelas, adding that the peso is expected to remain under pressure in the near term as ‘markets focus on upcoming US economic data and the Fed’s policy decision.’
Further, Asuncion pointed out that sustained strength in the dollar, elevated global yields, and higher energy prices could keep the currency ‘on the defensive.’
‘However, continued support from remittances, BPO revenues, tourism receipts, and foreign investment inflows should help temper excessive volatility,’ added Asuncion.
Overall, the chief economist of UBP said global factors are likely to remain the primary drivers of the peso’s movement in the coming months.
Within the trading day, the local currency hit an intraday low of 62.4 while its strongest point was at 62.25 against the greenback.
The peso opened at 62.25 against the dollar on Tuesday.