MANILA (UPDATED) - The Philippine peso plunged to an all-time low of P56.77 to the US dollar on Friday, Sept. 2, data from the Bankers Association of the Philippines (BAP) showed.

The peso even traded for as low as P56.90 during the day, according to BAP data.

Friday's close was weaker than the previous all-time record low of P56.45 on October 14, 2004.

"PHP (Philippine peso) slid to its weakest level to date, closing at P56.77 today. Ballooning trade deficit on account of surging imports coupled with financial outflows dragging on currency," ING Bank Manila's Senior Economist Nicholas Mapa said in a Tweet.

Mapa said the Bangko Sentral ng Pilipinas is likely to keep a hawkish stance and bring the interest rate to 4.5 percent by the end of the year.

The central bank on Aug. 18 raised the country's benchmark borrowing rate to 3.75 percent to tame inflation. It has so far raised the policy rate by 175 basis points.

BSP Gov. Felipe Medalla earlier said the recent interest rate hikes helped in stabilizing the peso.

The dollar rallied earlier this week after US Federal Reserve Chair Jerome Powell on Monday warned of more interest rate hikes to arrest inflation.

Medalla said the US policy adjustments is boosting the dollar and causing currency depreciation globally, not just the peso.

Economist Vic Abola, meanwhile, said early Friday the peso could strengthen temporarily in the last 2 months of the year due to the seasonal increase in remittances.

• Seasonal OFW remittances seen to strengthen peso temporarily: economist
• Bangko Sentral hikes benchmark rate by 50 basis points to 3.75 percent

-- with reports from Agence France-Presse and Edson Guido, ABS-CBN News

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