The Philippine peso rebounded on Wednesday, returning to the P58 level at P58.69 against the US dollar after briefly touching a record low of P59 earlier in the week. This recovery was driven by profit-taking and seasonal remittance inflows, which boosted the local currency. Data from the Bankers Association of the Philippines showed that the peso opened at P59.15, traded as high as P59.25 and as low as P58.65, before strengthening by the end of the day. Economists attributed the rebound to technical factors and market adjustments. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the weaker peso made conversions more attractive to overseas Filipino workers (OFWs) and dollar earners preparing for holiday expenses. Jun Neri, lead economist at Bank of the Philippine Islands, added that while recent depreciation was driven by rising oil prices, foreign selling in local equities, and a dovish central bank stance, the Bangko Sentral ng Pilipinas (BSP) may view the current exchange rate as 'tolerable.' He emphasized that this might not be a concern as long as the inflation forecast for the next two years remains within target. A slightly weaker peso could even support household spending through remittance gains. Analysts said further appreciation will depend on BSP’s market intervention and the strength of year-end remittance inflows, which traditionally pick up toward December. Mike Enriquez, president of Sun Life Investment Management and Trust Corp., noted that part of the correction came from foreign investors converting dollars to pesos for local transactions, including payments for the Maynilad IPO. He also expects remittances from OFWs to help stabilize the peso toward December. Economists also pointed to seasonal dollar inflows ahead of the Undas holidays and Christmas spending as a stabilizing factor. Sarah Tan, economist at Moody’s Analytics, said the recovery 'looks like a technical rebound as some investors used the weaker level to sell dollars.'
