Philippine Peso Hits Record Low of 61.04 Against USD
The Philippine peso reached a historic low of 61.04 against the US dollar during trading.
The peso has been depreciating due to global risk aversion, rising oil prices, and a strengthening dollar, briefly falling to 61.13 on the same day, marking multiple new lows this year.
Market mechanisms show that importers and businesses are accelerating their purchases of dollars for hedging, with peso holdings and local asset funds shifting towards dollars and crypto stablecoins. The Philippine central bank and exporters are under short-term pressure, while holders of dollar assets and global safe-haven funds benefit.
Source: Public Information
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The Philippine peso had previously tested the 60 level multiple times in 2025, and this breach of 61 is directly attributed to geopolitical tensions in 2026 (Middle East conflicts) combined with the Fed's expectation of maintaining high interest rates, resembling the peso's depreciation path during the 2018 emerging market turmoil.
In terms of capital flow, Philippine businesses and residents are converting pesos into dollars, USDT, and Bitcoin through banking channels and crypto platforms, shifting resources from the local stock market and bonds to offshore dollar assets and prepayments for imports. The strategy aims to hedge against import inflation and capital outflows, although the central bank's interventions are accelerating the depletion of foreign exchange reserves.
Similar cases include the collapse of the Sri Lankan rupee in 2022 and the continuous depreciation of the Turkish lira in the early 2020s; currently, the Philippines is in a phase of rapid depreciation driven by safe-haven demand, having set record lows for the seventh time or more this year.
Essentially, this reflects capital concentration: the dollar, as a global reserve currency, strengthens its pricing power during times of risk. The mechanism involves insufficient peso liquidity due to pressures on the Philippine current account and foreign capital outflows, leading to an overshooting of the exchange rate, with funds concentrating from emerging market local currencies to dollars and dollar-denominated assets, while amplifying import-driven inflation transmission domestically.