Recent developments have created a complex landscape for the HKD to PHP exchange rate. Analysts note that the Hong Kong Monetary Authority (HKMA) has implemented a series of interest rate cuts in response to the U.S. Federal Reserve's actions, reducing the base interest rate from 4.50% to 4.25% just last month. These moves aim to stimulate economic activity, but they also raise concerns about the weakening of the HKD. The HKMA has intervened significantly in the foreign exchange market, purchasing HK$4 billion and then HK$3.38 billion in subsequent months to stabilize the currency's value. Despite these efforts, the HKD is currently trading near 14-day lows at 7.5518 against the PHP, which is 1.3% above its three-month average of 7.4519.
On the Philippine side, subdued inflation at 1.7% as of October 2025 is offering the Bangko Sentral ng Pilipinas (BSP) the opportunity to consider rate cuts, potentially by 25 basis points in December. However, the peso has faced depreciation pressures due to concerns over economic slowdowns stemming from infrastructure spending issues and a record low exchange rate of 59.262 PHP per USD, marking a significant influence on currency markets.
The economic backdrop indicates that while the HKD is under pressure from interest rate cuts and market interventions, the PHP is grappling with its own trajectory. The Philippine peso's overvaluation, highlighted by analysts as detrimental to the manufacturing sector and export competitiveness, combines with a substantial trade deficit to challenge its stability.
Experts suggest that these dynamics may keep the HKD to PHP exchange rate within a stable range, but continued monitoring is essential given the ongoing adjustments in monetary policy and external economic pressures that could influence future performance.
