Peso falls to new low after Philippines trade deficit rises

Economists predict that the Philippine peso could fall to a record low against the dollar. The multibillion-dollar trade deficit has weighed on the currency and put pressure on the Philippine central bank to intervene in the market to curb the peso’s depreciation.

Economists at ING Group and eMBM Services expect the peso to fall to a record low of 62 pesos per dollar this year.

This year, the peso has fallen 13%, making it one of the worst performing currencies in Asia.

The Philippine central bank (BSP) has announced tougher measures to combat peso devaluation, including withdrawing liquidity from the system and raising borrowing costs.

Due to higher imports, the Philippines recorded a trade deficit of more than $5 billion in July for the fourth consecutive month, while Philippine government officials predict that the increase in imports could bring the Philippines a current account deficit of up to $20.6 billion this year.

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