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Back to headlinesAugust 27, 2026, 7:00 PM PHT

Economy · Currency Markets

Philippine Peso Closes at Record Low of ₱61.888 as BSP Raises Policy Rate to 5%

The peso weakened to a new record closing low while the Bangko Sentral ng Pilipinas delivered its third consecutive 25-basis-point policy-rate increase.

By FMB News DeskPublished August 27, 2026, 7:00 PM PHT2 min read
FMB News editorial visual for the Philippine peso record-low reportFMB News editorial visual
FMB News editorial visual accompanying the August 27 peso and monetary-policy report.FMB News editorial visualLicense details

Why this matters to Filipinos

FMB News connects the verified facts and evidence in this report to the decisions, costs, opportunities, and risks that may affect Filipinos, Philippine communities, and the country.

Editorial standard: Sources are listed below. Verified reporting, attributed claims, uncertainty, and analysis remain distinct.

Verified facts

What happened

The Philippine peso closed at a new record low of ₱61.888 against the US dollar on Thursday, August 27, according to Bankers Association of the Philippines market data reported by financial news outlets.

On the same day, the Bangko Sentral ng Pilipinas raised its target reverse repurchase rate by 25 basis points to 5.00%. The overnight deposit and lending facility rates were also raised to 4.50% and 5.50%, respectively.

What is driving the pressure

The BSP said inflation risks remain elevated even as headline inflation eased in July. Volatile oil prices, possible severe El Niño conditions and potential wage adjustments remain among the upside risks being monitored by monetary authorities.

A weaker peso can raise the local-currency cost of imported fuel, food inputs and other dollar-priced goods. It can also increase the peso value of dollar remittances, although that benefit can be offset when domestic prices rise.

Context

Context

The August increase was the BSP's third consecutive policy-rate hike in the current tightening cycle. The central bank said the measured increases are intended to anchor inflation expectations and reduce the risk of broader second-round price effects.

Filipino relevance

Why this matters

Exchange-rate weakness and higher interest rates affect households and businesses through different channels. Importers face higher peso costs for dollar-denominated goods, while higher policy rates can increase borrowing costs for consumers and companies.

What to watch next

What to watch next

Markets will watch whether the peso stabilizes after the rate increase and how inflation, oil prices, El Niño risks and domestic demand evolve ahead of the BSP's next policy review.

Sources and public record

Philippine News Agency: BSP hikes policy rates by another 25 basis points (August 27, 2026, 5:55 PM PHT)BusinessMirror: Peso hits new record low on drought fears, Iran war (August 27, 2026, 7:00 PM PHT)