Outlook
Outlook The Philippine peso faces ongoing pressure from expectations of BSP policy easing and mixed growth signals. Markets price a 25bp cut by the BSP, and MUFG Bank Ltd. now forecasts the peso weakening toward 60 per US dollar if domestic momentum remains weak. The jump in January derivatives trading points to a shift in how policy moves are transmitted to the economy, keeping near‑term volatility elevated. Spot levels show PHP/USD near 0.017101 USD per PHP, about 0.7% above the 3‑month average and within a roughly 1.8% trading range, underscoring a cautious path ahead.
Key drivers
Key drivers
• On January 15, 2026, the peso traded to an all‑time low near 59.46 per USD amid market pricing for a BSP rate cut.
• On January 25, 2026, BSP Governor Eli Remolona Jr. said the BSP does not automatically defend any specific exchange rate level, suggesting a possible orderly move toward the 60 per USD mark.
• On February 2, 2026, MUFG Bank Ltd. revised its forecast, projecting the peso weakening to 60 per dollar due to concerns about economic performance and corruption‑related spending issues.
• As of February 5, 2026, Philippine peso interest rate swap trading surged 60x to PHP43.5 billion in January, signaling a structural shift in monetary policy transmission and higher hedging costs for exporters/importers.
Range
Range
USD/PHP: 0.017101 current; 3‑month average 0.016966; traded in a stable 1.8% range from 0.016796 to 0.017101.
EUR/PHP: 0.014454 current; just below its 3‑month average; range 0.014088 to 0.014771.
GBP/PHP: 0.012562 current; 3‑month average 0.012657; range 0.012249 to 0.012995.
JPY/PHP: 2.6877 current; 3‑month average 2.6511; range 2.5814 to 2.6939.
What could change it
What could change it
• A clearer or more aggressive BSP policy stance (whether delaying or accelerating easing) could push the peso toward or away from the 60 per USD level.
• Fresh domestic data (growth, inflation, government spending) that shifts risk sentiment on the Philippine economy.
• Global risk appetite and US rate decisions impacting dollar strength or weakness.
• Revisions to forecast risk by MUFG or other major banks, altering market positioning.
• Changes in derivatives activity or policy transmission that alter hedging costs for corporates and remitters.
