By Aaron Michael C. Sy, Reporter
THE PHILIPPINE PESO slumped past the P58-a-dollar mark on Thursday as a widening corruption scandal over state flood control projects weighed on sentiment and hawkish signals from the US Federal Reserve supported the greenback.
It closed at P58.10 against the dollar, down 63.9 centavos from a day earlier, according to data from the Bankers Association of the Philippines posted on its website. That was its weakest level since Aug. 1, when it closed at P58.145.
The peso opened at P57.75 and traded from P57.73 to P58.17. Dollar turnover rose to $2.15 billion from $1.73 billion on Wednesday, reflecting heavier activity as the peso sold off.
“The dollar-peso closed higher on political unrest due to the congressional inquiry on the flood control scandal,” a Manila-based trader said by telephone.
Finance Secretary Ralph G. Recto estimated corruption in these projects might have cost the country as much as P118.5 billion in economic losses since 2023.
At a Senate Blue Ribbon Committee hearing on Thursday, former Public Works undersecretary implicated more Philippine lawmakers in the multibillion-peso kickback scheme.
The allegations added to investor unease after the Anti-Money Laundering Council froze more than 700 accounts and assets linked to anomalous infrastructure spending earlier this month.
The peso’s weakness also reflected external headwinds. “The peso continues to be dragged by hawkish Fed signals,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The dollar index was steady at 97.838, near a two-week high, according to Reuters. The greenback has held firm since the Fed trimmed rates last week as expected, with traders pricing in another 42 basis points of cuts across its final two meetings this year.
Still, officials including Fed Chairman Jerome H. Powell signaled future moves would depend heavily on incoming data.
Investors are awaiting the Fed’s preferred inflation gauge, the personal consumption expenditure price index due Friday, along with the final estimate for second-quarter US gross domestic product. A possible US government shutdown could also inject volatility.
The trader sees the peso moving from P58 to P58.30 on Friday, while Mr. Ricafort expects it to trade from P57.95 to P58.25.
