The Philippine Peso (PHP) has faced significant volatility recently, influenced by a mix of inflation data, economic concerns, and trade dynamics. As of October 2025, inflation in the Philippines was reported at a steady 1.7%, notably below the Bangko Sentral ng Pilipinas (BSP) target. Analysts from various financial institutions suggest that this subdued inflation could prompt a potential rate cut of 25 basis points in December, aimed at bolstering economic growth.
Conversely, concerns about a possible economic slowdown have pressured the peso, which weakened to a record low of 59.262 per US dollar on October 28. Factors contributing to this depreciation include ongoing issues surrounding infrastructure spending and expectations of further monetary easing from the BSP. ANZ Research has indicated that the peso has been overvalued since 2019, which poses risks to the manufacturing sector and overall export competitiveness.
Trade figures further complicate the peso's outlook, with the Philippines experiencing a trade deficit of approximately $43 billion, equivalent to 10% of GDP. While remittances from Overseas Filipino Workers (OFWs) amounted to $34 billion in 2024, they continue to play a crucial role in supporting currency strength amidst these challenges.
In terms of exchange rates, the PHP to USD currently sits at 0.016954, which is 1.8% below its three-month average. The currency has traded in a relatively stable 4.6% range. Meanwhile, the PHP to EUR is at 0.014632, also below its three-month average by 1.2%. The GBP has shown resilience, trading at near three-month averages with minor volatility, while the PHP to JPY has reached 90-day highs, reflecting a 1.5% increase above its three-month average.
Overall, as the market anticipates the potential BSP policy changes and grapples with ongoing economic challenges, stakeholders should remain vigilant in navigating the currency landscape in the coming weeks.
