Peso weakens amid COVID-19 concerns, BSP rate cut

The Philippine peso is expected to weaken further this week due to the ongoing impact of the coronavirus disease 2019 (COVID-19) and uncertainty surrounding the lockdown in Luzon.

On Friday, April 17, the peso closed at P50.90 against the US dollar, a decrease from its previous day's close of P50.80.

The weakening trend is attributed to the Bangko Sentral ng Pilipinas (BSP)’s recent off-cycle rate cut aimed at mitigating the economic impact of COVID-19.

UnionBank Chief Economist Ruben Carlo O. Asuncion noted that market reaction to the rate cut contributed to the peso's depreciation.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also cited the surprise 50-basis point cut in policy rates, which reduces interest income from fixed-income investments, as a factor in the peso’s weakening.