Peso plunges to new low, seen to stay at 59:$1 range

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January 15, 2026 | 12:00am

MANILA, Philippines — The peso slumped to a new record low of 59.44 to a dollar yesterday, eclipsing the previous low of 59.355 last Jan. 7, but is expected to stay largely range bound this year while the local stock market’s steep underperformance has already priced in growth headwinds, a foreign bank executive said.

In a statement, HSBC Private Bank chief investment officer for Asia Cheuk Wan Fan said the peso is expected to remain largely range bound this year against a softer macro backdrop but limited downside for Philippine assets amid a global push for portfolio diversification in 2026.

“After the peso weakened to its record low level against the dollar in 2025, we expect the peso to remain largely range bound this year and will reach 59.2 at the end of 2026,” Fan said.

A forex trader said the peso closed weaker as the dollar continued to draw support from global uncertainties, particularly geopolitical concerns following US President Donald Trump’s tariff actions against Iran and its trading partners.

Sentiment was also weighed down by expectations that the US Federal Reserve may deliver fewer rate cuts this year, keeping US yields elevated and the dollar attractive, the trader said.

Market participants are likewise watching developments related to Trump’s subpoenas involving the Fed chairman, which have added another layer of uncertainty to global markets.

Meanwhile, Fan noted that the Philippine equities market’s “significant underperformance against the regional peers in 2025 has already priced in the growth headwinds from weaker infrastructure investment and subdued domestic demand.”

Consensus estimates forecast modest earnings growth of six percent in 2025 and eight percent in 2026, while Philippine equities are priced at only 10.4 times forward price-earnings ratio “representing over 20-percent discount to its five-year average.”

“The deeply discounted valuations should limit further downside for the market. Hence, we maintain our neutral view on Philippines stocks,” Fan said.

The local market outlook comes as the bank said 2026 is set to be a year of recalibration for investors to strengthen portfolio resilience through multi-asset diversification to capture further upside from the global artificial intelligence (AI) boom and manage risks from policy and geopolitical uncertainties.

In its global asset allocation, HSBC Private Bank said the acceleration of AI adoption and monetization “will continue to support strong earnings growth in 2026,” underpinning its pro-risk stance and overweight on global equities.

It complements its US equity overweight with positive views on mainland China, Hong Kong, Singapore, South Korea and Japan, while enhancing diversification through overweight positions in global investment grade bonds, quality Asian and emerging market credit, gold and hedge funds, together with core allocations to private equity, private credit and infrastructure.

For the Philippines, HSBC Private Bank said soft domestic demand and subdued business sentiment continue to pose headwinds for economic growth this year.

It expects economic growth to come in at 5.2 percent in 2026 and 5.6 percent in 2027 on the back of sluggish government and private investment. Solid job creation in services exports and better weather conditions are expected to support a modest recovery in private consumption.

“Cheaper imports from China and easing global commodity prices have led to low and stable inflation. We expect inflation to remain tame at 2.4 percent in 2026 and 2.8 percent in 2027, below the midpoint of the central bank’s two to four percent target band,” Fan said.

She added that tighter fiscal policy and slower infrastructure spending will curb capital imports, narrow the current account deficit and give room for the central bank to keep policy accommodative.