The Philippine peso slipped past ₱58 per US dollar as flood-control corruption fears and US dollar strength shook investor confidence, raising inflation risks but boosting OFW remittances.
MANILA — The Philippine peso weakened past the ₱58 per US dollar mark this week, pressured by external headwinds from a stronger greenback and domestic unease over a widening flood-control corruption scandal.
The Bangko Sentral ng Pilipinas (BSP) reference rate on Friday, September 26, was ₱57.9180 per US$1. Bloomberg data showed the peso hovering near ₱58.18 per US$1 on Saturday, its weakest level since August.
Corruption probe rattles markets
The Senate’s inquiry into alleged anomalies in flood-control projects has stirred investor caution. Former Department of Public Works and Highways engineers testified that projects worth more than ₱545 billion were overpriced, substandard, or never built, allowing for large kickbacks.
The scandal widened after the Court of Appeals froze 135 bank accounts and 27 insurance policies, while regulators traced hundreds more to questionable transactions. The BSP responded by tightening rules on cash withdrawals, requiring enhanced checks for transactions above ₱500,000.
Finance Secretary Ralph Recto has warned that corruption in the program may have drained as much as ₱118.5 billion in economic value since 2023.
Peso under pressure
Analysts say the peso faces a “double squeeze”: political risk at home and hawkish US Federal Reserve signals that have lifted the dollar globally. BusinessWorld reported that daily dollar turnover in Manila’s spot market surged to US$2.15 billion from US$1.73 billion, reflecting heavier sell-offs.
The peso’s weakness spilled into equities, with the Philippine Stock Exchange index falling to a six-month low.
Economic implications
A weaker peso raises the cost of imports and fuels inflation, while increasing the burden of servicing foreign-currency debt. The slide comes weeks after the BSP cut its key interest rate to 5.0 percent, reducing its buffer in defending the peso.
Impact on Filipinos
A softer peso makes imported goods more expensive, from fuel to food, and could nudge inflation higher in the coming months. It also raises the cost of servicing the government’s foreign debt, straining public finances. For overseas Filipino workers, however, remittances converted into pesos may stretch further, offering some relief to households even as domestic consumers face higher prices.
