Manila: The Philippine peso, which ended almost flat against the US dollar for the second consecutive day on Wednesday, is not expected to depreciate further despite recently touching the 59-level.

According to Philippines News Agency, Corrie Purisima, Treasurer and Head of Markets and Security at HSBC, shared insights during the Makati Business Club’s year-end review and 2026 outlook event, ‘Beyond the Numbers’, held in Makati City. She noted that HSBC economists predict the peso will average at the 58-level this year and next. Purisima explained, “We don’t expect it for now to reach 60, and the reason for that are expected lower importations because of the slowdown in infrastructure spending. That should provide some comfort, lower imports, less pressure on the currency.”

The anticipated decrease in importation is expected to be mitigated by remittances from the business process outsourcing (BPO) sector and overseas Filipino workers, which are projected to be around USD35 billion to USD36 billion. “Those continue to be stable forces and providing some currency stabilization,” Purisima stated. However, she acknowledged ongoing pressures due to the Bangko Sentral ng Pilipinas’ (BSP) dovish stance, with expected cuts in key policy rates by 25 basis points next month and another 25 basis points next year.

Purisima also noted potential risks from the US dollar, citing a lower likelihood of the Federal Reserve cutting the Fed Funds rate due to inflation-related factors. “So, that should balance overall, and we do see it for now ending at 58 for this year,” she concluded.

During the same event, Ayala Corporation Managing Director Karl Chua expressed support for the BSP’s approach to allow market forces to dictate the local currency’s path. “I think it is a good policy to keep it at a free flow and to be determined by supply and demand,” Chua commented, emphasizing the importance of considering the real exchange rate adjusted for inflation and productivity.

Metropolitan Bank and Trust Company (Metrobank) chief economist and market strategist Nicholas Mapa provided additional insights, suggesting that the US dollar is expected to remain weak in general until 2026 despite the current peso depreciation. “Philippine-specific factors, however, should translate to sustained pressure on the Philippine peso as the economy is slated to run a current account deficit in 2026 and 2027,” Mapa outlined in a statement issued by the bank on Wednesday.