THE Philippine peso closed to a new record low of P58 against the United States dollar at spot trading on Wednesday.

The peso opened lower at P57.70 compared to Tuesday’s record close of P57.40, traded between P57.70 and P57.91, and closed near its lowest intraday rate.

Wednesday’s volume also hit $1.0515 billion, higher than the previous session’s $967 million.

Exchange rate pressures have worsened since higher rates were favoring the US dollar.Since the end-2021’s closing of P50.99, the peso has lost P7 or has devalued by 13.74 percent.

Spot market volatilities come from the market’s expectation that the Bangko Sentral ng Pilipinas (BSP) will further tighten the benchmark rate in the last three Monetary Board policy meetings for this year.

Depreciation pressures also come from the hawkish US Federal Reserve (Fed) that is favoring a strong US dollar.

Fernand Antonio Tansingco, Metro

Fernand Antonio Tansingco, Metropolitan Bank and Trust Co. (Metrobank) treasurer and head of the Financial Markets Sector, told reporters Wednesday that the pesodollar exchange rate will depend on when the local currency rate will be “in sync” with the US Fed.

Tansingco added that the BSP should “hopefully” close the year at 5 percent from its current 3.75 percent benchmark rate since the US Fed’s expected terminal rate or end-2022 policy rate is 4 percent.

Meanwhile, Asian Development Bank (ADB) Macroeconomic Research Division Director Abdul Abiad said during the Asian Impact Webinar on Wednesday that the peso’s weakness was “not at the extreme end.”

“It’s actually very much close to the average for the region,” Abiad said when asked about his assessments of the local currency’s performance against regional peers since the start of the year.

“The depreciation in the Philippine peso reflects not so much weakness in the peso but the strength of the dollar, and so it’s again driven by the US Fed tightening that we’ve just talked about,” he added.