Recent developments in the Philippine peso (PHP) reflect a complex economic landscape as inflation rates and market sentiment are shaping currency movements. Notably, October 2025 saw inflation stabilize at 1.7%, which is below the Bangko Sentral ng Pilipinas (BSP) target. Analysts suggest this trend could open the door for a 25 basis point rate cut in December, aimed at bolstering economic growth.
Despite this potential easing of policy, the peso recently depreciated to a record low of 59.262 per US dollar on October 28. Concerns regarding an economic slowdown, exacerbated by issues related to infrastructure spending and expectations of ongoing rate cuts, have weighed heavily on the currency. Additionally, a report from ANZ Research has indicated the peso’s ongoing overvaluation since 2019, which is negatively impacting the manufacturing sector and reducing export competitiveness.
The peso’s value is also influenced by the persistent trade deficit, which stands at approximately $43 billion, or 10% of GDP. In contrast, remittances from Overseas Filipino Workers (OFWs), projected at $34 billion in 2024, play a crucial role in supporting the currency.
In terms of recent exchange rate performance, the PHP to USD is currently trading at 7-day highs near 0.016992, representing a 1.6% decline from its 3-month average of 0.017266. Throughout this period, it has remained within a relatively stable range of 4.6%, oscillating between 0.016918 and 0.017702. The PHP to EUR is also at 7-day highs of 0.014674, just 0.9% below its 3-month average of 0.014807, while trading in a narrow range of 4.5%. The PHP to GBP stands at near parity with its 3-month average, trading at 0.012925. Furthermore, the PHP to JPY has reached 90-day highs of 2.6429, 1.8% above its 3-month average of 2.5954, indicating more favorable trends against the yen.
As the markets digest these developments, it remains crucial for individuals and businesses engaging in international transactions to stay informed about potential impacts on the peso's value. Currency forecasts and market trends will likely continue to evolve based on economic indicators and policy decisions by the BSP.
