The Philippine peso closed strongly on December 27, 2024, the final trading day of the year, as monetary interventions aimed to prevent the currency from falling below the historic low of P59:$1. The peso appreciated by 12.5 centavos, finishing at P57.845:$1, compared to P57.97 the previous day.
Over the year, the peso depreciated by P2.475 against the US dollar, closing at P55.37:$1 on December 29, 2023. However, it has improved by P1.155 from its record low of P59:$1 reached on December 19, 2024.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the peso's performance would continue to depend on interventions, which have been necessary for over two years. These measures aim to manage inflation and stabilize the peso's exchange rate, impacting import costs and overall inflation.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona confirmed that the central bank intervenes in the foreign exchange market during periods of stress for the peso. Ricafort suggested that the peso's recent strength could be linked to increased remittances from overseas Filipino workers (OFWs) and holiday spending.
Looking ahead, the BSP has indicated openness to further rate cuts in early 2025, following a total reduction of 75 basis points in 2024, including a 25-basis-point cut in December.