Peso falls as market awaits June CPI

THE PESO weakened again versus the dollar on Monday as players took positions before the release of June Philippine inflation data.

The local unit closed at P61.491 per dollar, dropping by 7.6 centavos from its P61.415 finish on Friday, Bankers Association of the Philippines data posted on its website showed.

The peso opened Monday’s session weaker at P61.50 against the dollar. It traded within a narrow range as it reached an intraday high of P61.45, while its worst showing was P61.55 against the greenback.

Dollars exchanged fell to $876.75 million on Monday from $1.603 billion on Friday.

“The peso weakened amid expectations of an elevated headline inflation level for June,” a trader said in a Viber message.

Meanwhile, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the June consumer price index (CPI) may have eased slightly from the previous month “after the recent sharp decline in global crude oil prices and some rollback local fuel pump prices especially since the interim US-Iran deal in mid-June 2026.”

This could reduce the odds of further tightening by the Bangko Sentral ng Pilipinas (BSP), he said in a Viber message.

The Philippine Statistics Authority will release June inflation data on Tuesday, July 7.

A BusinessWorld poll of 18 analysts yielded a median estimate of 6.6% for June headline inflation, slower than the 6.8% recorded in May but faster than the 1.4% in the same month last year. This is within the BSP’s 6%-7% forecast.

If realized, June inflation would ease for a second straight month and would be the slowest since the 4.1% recorded in March.

However, it would also be the fourth consecutive month that the CPI would breach the BSP’s 2%-4% tolerance range.

Oil prices eased globally and domestically last month, which offered consumers some relief following nearly three months of oil price spikes.

In June, local fuel retailers lowered the price of gasoline by as much as P7.50 per liter and diesel by as much as P21.19 per liter, but slightly raised it to about P1.98 per liter for kerosene.

BSP Governor Eli M. Remolona, Jr. has left the door open to additional hikes as they want to bring inflation back to their 3% target.

He said on Monday that the economy can still absorb another 25-basis-point (bp) hike as they see growth recovering to above 3% this semester.

The Monetary Board has delivered a total of 50 bps in rate increases since April, bringing the policy rate to 4.75%.

The inflation report will be the key trading driver for Tuesday, the trader said.

Both the trader and Mr. Ricafort said the peso may range between P61.40 and P61.60 per dollar on Tuesday. — Katherine K. Chan