MANILA - The Philippine peso strengthened, closing at P56.94 versus the US dollar on Wednesday from a previous close of 57.375 on Tuesday, according to the Bankers Association of the Philippines.

The peso has picked up in recent weeks after falling to as low as P59 to the dollar in early October.

Analysts and the BSP have said that the peso would receive support from overseas Filipino remittances, which generally pick up towards the Christmas season.

Amid signs that the peso is stabilizing, Fitch Solutions said the Bangko Sentral ng Pilipinas will slow down its policy tightening, although it may still hike its benchmark rate by another 75 basis points in December.

“The stable peso will allow the pace of rate hikes to slow down so we expect only one more hike to 5.75 [percent],” said Fitch Solutions Global Emerging Market Economist John Ashbourne.

The BSP's Monetary Board is set to meet again on Dec. 15 and has so far hiked rates by 300 basis points this year pushing its benchmark to 5 percent.

Many local analysts meanwhile expect the BSP to hike interest rates by only 50 basis points in December.

- Report from Warren de Guzman, ABS-CBN News

• Peso sinks to new record low, closes at P59 to $1 on Oct. 3
• Peso gains strength against US dollar, closes at P57.97 to $1

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