Philippine peso (PHP) Market Update
The Philippine Peso (PHP) is currently experiencing a notable depreciation trend against the US Dollar (USD), with analysts questioning whether the USD/PHP rate has peaked. Recent data indicates that the PHP is trading at 90-day highs near 0.018059, representing a 3.2% increase above its three-month average of 0.017507. The pair has operated within a stable 5.2% range, indicative of current volatility in the foreign exchange market.
Market observers from ABN Amro suggest that deteriorating external balances and an overvalued peso could lead to further PHP depreciation against the USD in 2025. This outlook is compounded by the recent imposition of a 17% reciprocal tariff on Philippine goods by the US, highlighting continued trade tensions.
Additionally, the political landscape in the Philippines is facing uncertainty ahead of the upcoming mid-term elections. The arrest of former president Rodrigo Duterte on allegations of crimes against humanity may influence electoral outcomes and market sentiment. Although mid-term elections typically do not prompt drastic policy changes, the added political risk could affect investor confidence.
Regarding other currency pairs, the PHP to Euro (EUR) has reached 30-day highs near 0.016053 and has maintained alignment with its three-month average despite an 8.8% range in recent trading. The PHP to British pound (GBP) is at 14-day highs around 0.013579, slightly above its three-month average, while the PHP to Japanese yen (JPY) stands at 30-day highs of 2.6253, which is 1.7% above its average of 2.5808 with a stable trading range.
As the situation develops, market participants should closely monitor these exchange rates and potential political impacts, as they may provide opportunities or risks for international transactions. The overall outlook for emerging Asian currencies remains tenuous, especially given the Philippines’ limited gains from supply chain diversification, as competitors like Vietnam and India make significant strides in market share.
