Peso Tumbles as Oil Prices Bite into Philippine Economy
The Philippine peso has become the worst-performing currency in Asia this year, falling 6.2% against the dollar as oil prices surge. The country's reliance on service industries and high inflation have depleted its foreign reserves, which have dropped by nearly 9% to $103 billion since February.
President Ferdinand Marcos Jr. and Bangko Sentral ng Pilipinas Governor Eli Remolona have warned that trying to stabilize the peso would deplete the country's reserves further. Strategists at JPMorgan Chase & Co. and Bank of America predict the currency will extend its decline, potentially reaching as low as 65 per dollar by mid-2024.
The trade deficit has widened by nearly a third this year, driven by the high cost of oil imports. The central bank is now focused on managing sharp currency swings rather than trying to guide the peso back above 60 against the dollar.