Philippines: Philippines peso recovers slightly in October
October 15, 2015
In the second half of September and at the beginning of October, the Philippines peso (PHP) appreciated slightly against the U.S. dollar, reversing some of the losses made in recent weeks. The peso was on a depreciating trend between mid-May and the beginning of September and hit an over-five-year low of 47.03 PHP per USD on 7 September. However, more recently, the peso recovered slightly and appreciated to 45.91 PHP per USD on 15 October, which was 1.7% stronger than on the same day in September. Nevertheless, this value was still 2.3% weaker than on the same day of the previous year.
The recent appreciation of the peso partly reflected fading expectations for a U.S. interest rate hike this year, following weaker-than expected U.S. data and the release of the last Fed minutes. In addition, Central Bank Deputy Governor Diwa Guinigundo’s recent statement that the recovery of the peso could be sustained, thanks to the Philippine’s ample foreign currency reserves and solid current account surplus, also contributed to the peso’s strengthening. In recent months, the Philippines peso performed more robustly than most other emerging-market currencies in Southeast Asia, which showed great volatility after the depreciation of the Chinese yuan and turmoil in financial markets.