The Philippine peso lost further value against the US dollar on Monday, registering a fresh low in more than 10 years, on external and domestic factors.
The local currency closed 6 centavos weaker at P50.27:$1 on Monday. It was the peso’s weakest finish since settling at P50.32:$1 on September 26, 2006.
It opened at P50.24:$1 before trading between P50.24 and P50.29.
ING Bank Manila said the exchange rate was affected by external factors, including expectations about the upcoming speeches by US President Donald Trump and Federal Reserve policymakers this week.
“But the PHP’s underperformance, not only today but since start of the year, is a result of local factors,” said ING Bank’s senior economist Joey Cuyegkeng.
The premium enjoyed by the peso to the index of Asian currencies, excluding the Japanese yen, has actually widened to as high as 5 percentage points, Cuyegkeng noted.
“We attribute this [to]local political uncertainties, especially in the last couple of weeks. This set of political developments leading to intensified political noise result in cautious views tending to favor USD rather than PHP,” he said.
“Stresses also on external payments including a widening trade deficit and lower current account surpluses (although some say a deficit in the current account is looking more likely) also contribute to PHP’s underperformance,” he added.
The peso first touched the P50:$1 level on November 24 last year as bets on an interest rate hikes in the US—which actually happened in December —favored the dollar. It depreciated by 5.35 percent against the US dollar last year.