The local currency resumed its decline yesterday, mirroring the slide in investor confidence.

The peso closed at P59.17 per US dollar on Wednesday, 0.185 or 0.3 percent weaker than the previous day.

This marks the worst finish for the currency, surpassing the previous P59.13 set on 28 October 2025. However, the depreciation hit an intraday record of P59.26 posted on 29 October, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said.

The peso’s decline came amid political uncertainty, following reports that the Armed Forces of the Philippines (AFP) is validating alleged destabilization efforts, and after the US dollar strengthened against major global currencies from recent two-week lows.

The dollar’s rebound was supported by optimism over a possible resolution to the US government shutdown, which began on 1 October — the longest in American history — and by a steady 10-year US Treasury yield at 4.09 percent, still near seven-month lows.

The Philippine Stock Exchange index ended at 5,714.02, up by +1.51 percent.

Regina Capital Development Corp. managing director Luis Limlingan said the bourse rebounded as investors engaged in bargain hunting after several days of heavy selling.

“The recovery came despite the peso weakening to the 59 per US dollar level again, reflecting continued external pressure. Overall, sentiment improved slightly as traders looked for short-term gains amid oversold market conditions,” he added.

Global indicators improving

Global risk sentiment also improved as US markets gained for a third consecutive day, with the Dow Jones Industrial Average hitting record highs, fueled by expectations of a potential 0.25-percent rate cut by the Federal Reserve in December.

Despite the peso breaching the psychological P59 level, analysts noted that the exchange rate remains relatively stable, supported by seasonal inflows of overseas Filipino workers’ remittances ahead of the holiday season. The onset of Christmas-related spending typically prompts dollar holders to convert their earnings to pesos, which could provide some near-term support for the local currency.

The country’s gross international reserves (GIRs) remain robust at over US$109.7 billion (P6.493 trillion) as of end–September, equivalent to more than seven months’ worth of imports, well above international adequacy standards. GIRs serve as a substantial buffer against external shocks, which could further destabilize the local currency.

The peso’s direction in the coming weeks will depend on the BSP’s currency management, seasonal remittance inflows, and the outcome of the Federal Reserve’s December policy meeting, which could set the tone for global currency movements heading into 2026.