THE Philippine peso further weakened as it recorded a new all-time low primarily attributed to the Middle East crisis-induced global inflation.
Data released by the Bankers Association of the Philippines (BAP) showed that the local currency weakened by 8.1 centavos from its previous record to finish at 61.721 to the dollar. The Philippine peso briefly slid to an intraday low of 61.73.
Trading volume eased to $1.2 billion from $1.6 billion in the prior session. The dollar rose more than one percent this week, its sharpest gain since early March, as US Treasury yields climbed to one-year highs, according to a Reuters report.
Financial analysts also hinted that domestic political developments may have also contributed to the Philippine peso devaluation.
The challenges in the local fundamentals have kept the peso relatively weak, for which the Bangko Sentral ng Pilipinas (BSP) imposed interventions in key levels.
Oxford Economics, for its part noted that the Middle East conflict could push the Philippine economy toward its weakest growth since the global financial crisis, outside the pandemic, as surging inflation squeezes spending in a nation driven by consumption.
In a research brief, London-based Oxford Economics said it expects average growth this year to hit 3.5 percent, down from its previous estimate of nearly six percent.
Excluding the pandemic slump in 2020, the revised outlook would mark the slowest expansion since 2009, when the Wall Street—centered global financial meltdown and a barrage of typhoons dragged growth down to just 1.4 percent.
Even so, the downgrade would still place the Philippines ahead of several advanced Asian economies, including South Korea (2.5 percent), Singapore (2.3 percent), Australia (2.1 percent) and Japan (0.3 percent). It would also outpace the estimated 1.4-percent growth for Thailand.
