On Wednesday, the Philippine peso fell slightly against the US dollar at P57.11 in the Philippine trading system, but recorded the lowest level in the day at P57.27.
According to the Bankers Association of the Philippines (BAP), the peso opened at P57.1 against the dollar.
BAP data showed the peso trading from P57.1 to P56.27 with an average of P57.202.
The peso’s exchange rates against the US dollar fell by 34 centavos, or 0.6 percent, to close at 57.11, the highest level since September 8, 2022, when it closed at P57.18.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., told The Manila Times that the current peso exchange rate could lead to sharper increases in domestic policy rates by Bangko Sentral ng Pilipinas.
However, Finance Minister Benjamin Diokno said on Wednesday during a briefing for the Development Budget Coordination Committee to the Philippine Senate on the proposed budget for fiscal year 2023, that the impact of the depreciation of the Philippine peso against the US dollar is “appropriate” to the country’s budget.
He added, “The net effect of P1 consumption is P7.6 [billion] Reducing the state budget deficit.
Earlier, Rycafort said the peso-dollar exchange rate could “seasonally improve” towards the end of the year after it plunged to record lows.
“The peso is expected to improve seasonally towards the end of the year due to the seasonal increase in OFW remittances and export revenue to convert into holiday pesos, based on consistent patterns seen for many years/decades.”
However, a slightly weaker peso on Wednesday also negatively impacted investor sentiment on the Philippine Stock Exchange, along with news from the US that inflation in August came in at 8.3% or above expectations.