06.01.202604:16:25UTC+00Philippine Peso Lingers Near 59 Level

The Philippine peso hovered near the significant 59-per-dollar mark, closely approaching its record low. Despite indications from the Bangko Sentral ng Pilipinas (BSP) suggesting that its rate-cutting cycle might soon conclude, the currency showed minimal reaction. The BSP hinted at a potential final rate reduction this year, possibly by February, as stated by Governor Eli Remolona, who remarked that the policy rate is nearing its target level. His observations followed the release of data indicating a rise in annual inflation to 1.8% in December from November's 1.5%. This figure surpassed expectations and marked the highest level since March. The central bank anticipates that inflation may rise slightly this year, yet it should remain within the 2%–4% target range. The recovery in domestic demand is projected to progress gradually due to the effects of lower interest rates and increased public spending. Nonetheless, the peso continues to struggle under pressures from weak investor confidence and subdued foreign investment inflows.