The Philippine peso weakened further on Wednesday, closing at P59.17 against the US dollar, up by P0.185 or 0.3 percent from the previous day. This marks the highest close level on record, surpassing the previous high of P59.13 set on 28 October 2025, though still slightly below the intraday record of P59.26 posted on 29 October.

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.

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 worker (OFW) remittances ahead of the holiday season. The onset of Christmas-related spending typically prompts dollar holders to convert their earnings into 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 2025, equivalent to more than seven months’ worth of imports, well above international adequacy standards. GIRs serve as a strong buffer against external shocks, which could further destabilize the local currency.

The peso’s direction in the coming weeks will depend on 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.