The Philippine peso has hovered dangerously close to historic lows this month, but the country’s central bank is moving to reassure markets that a slide to the politically and psychologically charged P60-to-the-dollar level is unlikely in the near term.
In a series of recent briefings, the Bangko Sentral ng Pilipinas (BSP) said that while the peso has tested record territory, current conditions do not point to an imminent breach of the P60:$1 threshold. The message comes as the currency trades just below 59 to the dollar, reflecting a delicate balance between easing domestic policy and volatile global forces.
Peso Near Record Lows, but Stabilising—for Now
As of late January 2026, the peso has been trading in a narrow but fragile range. The USD/PHP rate slipped to 58.9670 on January 23 and hovered at 58.9990 on January 26, according to market data. The BSP’s own Philippine Dealing System closing rate stood at 59.090 per US dollar.
Earlier this month, the currency briefly weakened to 59.3 per dollar, testing a new record low and reviving anxieties that the peso might soon tumble toward P60—a level that carries outsized symbolic weight for traders and the public alike.
That fear is not unfounded. In early January, the peso touched an all-time low of 62.86 against the dollar, a reminder of how quickly sentiment can turn in thin and volatile markets.
BSP Signals Confidence as Easing Cycle Nears End
BSP Governor Eli Remolona has sought to calm nerves by emphasising that monetary policy is approaching a turning point. Earlier this month, he said that a final interest rate cut in February “is on the table” but stressed that it is not guaranteed.
Despite a pickup in December inflation, Remolona described price pressures as still “reasonable,” adding that domestic demand is set for a gradual recovery. Taken together, these signals suggest the central bank believes it has room to support growth without sacrificing currency stability.
In effect, the BSP is walking a tightrope: easing policy to nurture recovery, while reassuring markets that it will not allow the peso to spiral further.
Why P60 Matters So Much
The P60:$1 level is more than a round number. For currency traders, it represents a psychological line in the sand—much like a seawall holding back rising waters. Once breached, it risks accelerating capital outflows and speculative pressure.
For ordinary Filipinos, the implications are far more tangible.
- Higher prices for imports: Fuel, food staples, medicines and electronics become costlier as the peso weakens.
- Rising transport and food costs: Imported petroleum feeds directly into pump prices and public transport fares.
- Pressure on savings: Peso savings lose purchasing power if depreciation fuels inflation.
- Mixed impact on remittances: While overseas Filipinos earn in dollars, persistent volatility undermines real income planning for families back home.
With millions of households relying on remittances and imported goods, even small shifts in the exchange rate can ripple quickly through daily life.
Markets Split on What Comes Next
Looking ahead, forecasts reveal a market divided.
Trading Economics expects the peso to strengthen modestly, projecting a rate of 58.86 by the end of the first quarter and 57.96 within 12 months. That outlook assumes inflation remains under control and that confidence in the Philippine recovery holds.
Other forecasters are less optimistic. Traders Union sees the peso edging weaker, with USD/PHP possibly reaching 59.02 by the end of 2026.
The divergence underscores the uncertainty surrounding global interest rates, US Federal Reserve policy, and capital flows—factors largely outside the BSP’s control.
Volatility Reflected on the Trading Floor
Commercial banks continue to price in caution. On January 23, CTBC Bank quoted the peso at 58.800 to buy and 59.200 to sell, a notably wide spread that reflects nervous positioning around key levels.
Such quotes suggest that while markets respect the BSP’s guidance, they are not ready to rule out renewed pressure should external conditions deteriorate.
A Reassuring Message, with Caveats
For now, the BSP’s stance has helped steady expectations. By signalling that rate cuts are nearing an end and that economic fundamentals remain intact, the central bank is effectively telling markets that the peso is unlikely to plunge past P60 in the immediate future.
Yet officials have been careful not to sound complacent. Currency markets remain fluid, and the peso’s fate will depend as much on global tides as on domestic policy.
In that sense, the BSP’s message is less a prediction than a warning against panic: the peso may be bruised, but for now, the central bank insists, it is not yet on the brink.
