Philippine peso poised for rebound as holiday remittances set to arrive
The currency has come under pressure following Bangko Sentral ng Pilipinas’ unexpected cut in the benchmark interest rate in early October
[MANILA] The Philippine peso looks poised to rebound from its record low, with seasonal year-end remittances from millions of Filipinos abroad expected to give the currency a boost.
The peso may strengthen more than 2 per cent to 57.80 per US dollar by the end of December, according to OCBC. An analyst from Rizal Commercial Banking expects the currency to rise higher to 57.50 against the greenback.
Inflows typically peak in December, helping the peso to gain during the month in eight of the past 10 years, according to Bloomberg-compiled data. Remittances are expected to rise 3 per cent this year, according to the central bank, after reaching the highest level of US$34 billion in 2024.
“Remittances will mitigate peso weakness and curb the recent losses,” said Christopher Wong, a currency strategist at OCBC in Singapore. “We also expect domestic uncertainties relating to spending and growth to fade over time.”
Overseas transfers are among the nation’s biggest sources of foreign exchange. The Philippines was the world’s fourth-largest recipient of remittances in 2024, according to the World Bank.
The peso has come under pressure following Bangko Sentral ng Pilipinas’ unexpected cut in the benchmark interest rate in early October. Sentiment worsened after a member of the Monetary Board on Monday said that borrowing cost will likely be lowered by 25 basis points when policymakers meet in December, with more reductions expected in 2026.
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The peso fell as much as 0.2 per cent to an all-time low of 59.26 per US dollar on Wednesday.
Read: Philippine Peso Record Low Cracks Years of Central Bank Support
More than 10 million Filipinos live and work abroad, and most of them send money home to help their families. About two million Filipinos were deployed overseas from January to August this year, 20.5 per cent higher from a year ago, according to the government.
“Fundamentally, the peso should stabilise within the 58 levels, given strong remittances are expected in the next two months,” said Roland Avante, president of Philippine Business Bank. BLOOMBERG
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