Spending woes to weaken peso

Japanese financial giant MUFG Bank Ltd. expects the peso to remain on a depreciating trend against the United States dollar, extending a streak of underperformance fueled by domestic government spending squeeze and fiscal uncertainty.

- BY DERCO ROSAL

In a research note published on Friday, Jan. 10, MUFG Bank noted that while a broad strengthening of the dollar has pressured most emerging market peers, the peso and the Indonesian rupiah have been uniquely hampered by internal fiscal tightening.

The local currency started 2026 with significant volatility, hitting a record low of P59.355 per dollar on Wednesday last week as geopolitical tensions between the US and Venezuela triggered a wider selloff in risk assets.