Peso slumps to new record low as stocks tumble

The Philippine Stock Exchange Index (PSEi) fell 126.30 points, or 2.20 percent, to 5,610.39 on Thursday, while the peso weakened 15 centavos, or 0.24 percent, to a new record-low close of P62.90 per US dollar from Wednesday’s P62.75, as mounting expectations of further interest-rate hikes in the Philippines and the United States weighed on sentiment.

The selloff followed minutes from the US Federal Reserve’s September meeting showing that most officials saw another rate increase as likely appropriate by year-end. The Fed raised its policy rate by 25 basis points in September, and markets were pricing in a pause in October but a strong possibility of another hike in December. The prospect of higher US rates kept the dollar firm and added pressure on emerging-market currencies.

The PSEi’s decline was broad-based, with all sectors ending lower. Services suffered the biggest drop, plunging 4.86 percent, followed by Mining and Oil with a 3.43-percent decline. Financials fell 1.43 percent, Property lost 1.02 percent, while Industrials and Holding Firms slipped 0.09 percent and 0.06 percent, respectively.

Trading strengthened, with turnover reaching P6.38 billion. Foreign investors were net sellers, posting P1.18 billion in outflows.

San Miguel Corp. was the day’s top index gainer, rising 2.67 percent to P61.50. Semirara Mining and Power Corp. was the biggest laggard, plunging 13.39 percent to P11.00.

The peso opened at P62.65 and traded between P62.65 and P62.90 before closing at the session high of P62.90. The BAP AM weighted average was P62.730, while the PM weighted average climbed to P62.817, indicating heavier dollar demand in afternoon trading.

The local currency has now fallen to record lows more than 20 times since the onset of the Middle East conflict. Thursday’s close surpassed the previous record low of P62.86 posted on 14 September 2026.

The full-day BAP weighted average was P62.766, unchanged from Wednesday, while the FX settlement rate eased to P62.730 from P62.778. Total spot-market volume rose to $1.44983 billion from $1.208 billion, with AM volume at $855 million and PM volume at $594.831 million.

The peso’s record-low close came as the dollar remained supported by expectations of higher US interest rates, while domestic inflation fueled expectations of further BSP tightening.

Local monetary policy expectations also turned more hawkish after September inflation accelerated to 7.2 percent from 6.1 percent in August. Several economists now expect the Bangko Sentral ng Pilipinas to raise its benchmark rate by at least another 25 basis points at its October meeting from the current 5 percent. BPI expects two more hikes this year, potentially taking the policy rate to 5.5 percent by December.