The Bangko Sentral ng Pilipinas (BSP) does not expect the peso to breach the P60-per-dollar level anytime soon, adding that it will continue to closely monitor sharp movements in the currency before stepping in.
Speaking to reporters at the Philippine International Convention Center last Friday, BSP Governor Eli M. Remolona Jr. said that while the central bank stands ready to defend the peso, intervention will be reserved for periods of extreme volatility in the foreign exchange market.
“Not soon,” Remolona said. “It depends on how it gets there. Just because it’s P60 [to a dollar] doesn’t mean we’ll defend.”
On the same day, the peso closed at P59.09 per dollar, marking a notable recovery from its record low of P59.46 on 15 January.
The local buck has shown signs of stabilization following a prolonged slide, with dollar demand easing after optimism surrounding the Trump-led acquisition of Venezuela’s oil assets faded. Global oil prices have also leveled off, providing additional support to the peso.
Late last week, United States President Donald Trump also walked back additional tariff threats against select European countries that opposed his planned takeover of Greenland, further dampening demand for the greenback.
The BSP has maintained a “wait-and-see” approach to exchange rate management, intervening only during episodes of extreme volatility, often triggered by geopolitical tensions. Malacañang has previously said President Ferdinand R. Marcos Jr. wants to avoid a slide to P60 per dollar, as a weaker peso would raise the real cost of the country’s debt.
On monetary policy, Remolona said a possible cut to the BSP’s target reverse repurchase rate (RRP) at the Monetary Board’s 19 February meeting remains uncertain.
“Even that cut, that’s still a maybe. It’s still not certain,” he said, noting that any decision would depend heavily on incoming economic data such as inflation and growth.
The Philippine Statistics Authority, in coordination with the Department of Economy, Planning and Development, is set to release fourth-quarter 2025 GDP data next Thursday, 29 January.
Remolona has earlier said the figure would be “less than” the 4.0 percent growth recorded in the third quarter, which marked a three-year low.
He attributed the slowdown to the flood control corruption scandal, which dampened public infrastructure spending and eroded investor confidence.
Remolona reiterated that inflation will be a key determinant in any rate decision. Headline inflation averaged 1.7 percent in 2025, well below the government’s 2 to 4 percent target range. Lower interest rates encourage banks to lend more, increasing liquidity in the economy and potentially pushing inflation higher.
“It would help us decide to cut. It’s not the only factor. Our mandate is inflation. Inflation is the number one factor,” he said.
“It depends on the data, so as usual, it’s one meeting at a time,” he added.
