Philippine peso drops to record low amid elevated oil prices and domestic deficits

The short version

• The Philippine peso reached an all-time low of 62.71 against the US dollar, having depreciated roughly 6% since the beginning of the year.
• Higher crude oil prices resulting from Middle East supply disruptions have combined with rising US Treasury yields and domestic fiscal and current account deficits to pressure the currency.
• The depreciation elevates costs for imported goods and energy, contributing to an August inflation rate of 6.1%, which is double the central bank's target.
• The government has promised tighter fiscal discipline and anticipates central bank market interventions, while overseas worker remittances offer a partial economic cushion.

Key facts

• The Philippine peso hit an all-time low of 62.71 against the US dollar, continuing a decline of approximately 6 percent since January 1.[Al Jazeera]
• The Philippines declared a state of national emergency in March following disruptions to Gulf oil shipments after the shutdown of the Strait of Hormuz.[Al Jazeera]
• The national inflation rate reached 6.1 percent in August, about double the target set by the central bank.[Al Jazeera]
• Filipinos abroad sent home a record $35.63 billion in remittances last year, contributing an estimated 8 to 9 percent of gross domestic product.[Al Jazeera]
• The administration of President Ferdinand Marcos Jr. pledged to improve fiscal discipline and stated it anticipates central bank intervention to stabilize the currency.[Al Jazeera]

Sources

Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.

• Why has the Philippines’ peso plunged to a record low?Al Jazeera