Peso weakness, volatility to persist

The peso's weakness and volatility could persist if economic and political uncertainties that make investors uneasy linger, according to a former Bangko Sentral ng Pilipinas (BSP) official.

- BEN ARNOLD DE VERA and DERCO ROSAL

This was the assessment of former BSP deputy governor Diwa C. Guinigundo despite the local currency’s 44-centavo rebound on Wednesday, Oct. 29, closing at P58.69 against the United States (US) dollar from the record low of P59.13 last Tuesday, Oct. 28. (See related News in Brief story)

While the Philippine peso is unlikely the most volatile currency in the region, “unless the fundamental and uncertainty factors are addressed, [its] volatility may likely continue, Guinigundo, who is now the Philippines analyst at New York-based macroeconomic and geopolitical research and analysis firm Global-Source Partners, told Manila Bulletin on Oct. 29.

Interpreting for Manila Bulletin a Philippine peso GARCH volatility analysis from the V-Lab website of New York University’s (NYU) Stern School of Business, Guinigundo noted that “the prediction of stronger volatility extends to one year.”

In terms of currency volatility, or the magnitude of fluctuation against the US dollar, data provided by Guinigundo showed that from January to September 2025, the peso’s 0.8671 percent remained lower than last year’s 1.1045 percent.