Photo illustration of US dollar to PH peso exchange in this photo taken on September 30, 2022. Gigie Cruz, ABS-CBN News 

MANILA - The Philippine peso further depreciated on Thursday and closed at P57.78 to the US dollar. This was weaker than its previous closing value of 57.55 on Wednesday. 

During intraday trading, the peso fell to as weak as P57.96. 

Charmaine Co, research analyst at COL Financial said that the peso's depreciation was due to the strength of the dollar. 

"Across the board, across different currencies I think, we're really seeing the case of a strong dollar especially because I think interest rate cuts are expected to be delayed," Co said in an interview with ANC. 

The Bangko Sentral ng Pilipinas also said that the peso's recent decline was due to the strength of the dollar. 

"The story has been one of dollar strength rather than peso weakness. Escalating tensions in the Middle East led to safe-haven flows into the US dollar at the expense of most other currencies. Nonetheless, the BSP continues to monitor the market and stands ready to manage any unnecessary movement and excessive volatility," the BSP said in a statement.

The BSP chief earlier also said the peso's slide came amid expectations that the US Federal Reserve would not be cutting interest rates anytime soon

Last week, Fed Chairman, Jerome Powell, said persistently elevated inflation will probably delay any Fed interest rate cuts until later this year.

“If higher inflation does persist,” he said, “we can maintain the current level of [interest rates] for as long as needed,” Powell was quoted as saying. 

A weaker peso is seen as favoring exporters as prices of Philippine-made goods become cheaper and more attractive to international buyers. Families of overseas Filipinos who rely on dollar remittances are also expected to benefit as they get more pesos per dollar. 

Importers however are at a disadvantage as import costs rise, especially for commodities like oil and other fuels.

- With a report from Agence France-Presse