BMI: Peso weakness may persist on graft

While the Philippine peso is seen staying chained to the P59:$1 level by the end of 2025 owing to the flood control graft scandal, this prolonged weakness has become a boon to the wider trade deficit that the country has with the rest of the world.

- By DERCO ROSAL

"We expect peso weakness and front-loaded exports to support a modest narrowing in the current account deficit from four percent of gross domestic product (GDP) in 2024 to 3.4 percent in 2025 and 3.2 percent in 2026," BMI said in a Nov. 24 report.

Despite support from the weak peso, BMI projected that the current account deficit would remain wider than the less-than-half-a-percentage-point (ppt) level posted between 2015 and 2019 during the administration of former president Rodrigo Duterte.

According to BMI, the graft scandal has worsened the performance of the local currency such that it created friction in the peso's attempt to remain steady against the United States (US) dollar.