The Philippine peso closed at P61.30 against the US dollar on Tuesday, April 28, marking a new record low amid global uncertainties from the Middle East conflict.
Data from the Bankers Association of the Philippines showed the peso opened at P60.8 against the dollar on Tuesday before closing at P61.30. The local currency had appreciated to around P57.6 on February 28 prior to US strikes on Iran but has weakened since then.
Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, attributed the peso's decline to a lack of progress in US-Iran negotiations and the continued closure of the Strait of Hormuz.
While the depreciation benefits families of overseas Filipino workers and dollar earners through higher remittances, it raises costs for imports like oil. JC Punongbayan, Rappler's resident economist and assistant professor at the University of the Philippines School of Economics, said, "For ordinary Filipinos, this matters because a weaker peso makes imported goods, fuel, power inputs, and some food items more expensive. All this will further stoke inflation, which is already on the uptrend."
The Bangko Sentral ng Pilipinas forecasts average inflation at 6.3% this year, potentially worsened by the peso's fall.
