The Philippine peso (PHP) has faced significant pressure recently, reaching a record low exchange rate of P59.22 to the US dollar on December 9, 2025. This decline is primarily attributed to expectations of further monetary easing both in the Philippines and the United States. Analysts believe that these easing measures, which could lower interest rates, contribute to a weaker currency as they diminish returns on investments denominated in PHP.
On December 11, 2025, the Bangko Sentral ng Pilipinas (BSP) implemented a 25-basis-point rate cut, suggesting a potential pause in the current cycle of monetary easing. BSP Governor Eli Remolona mentioned that future rate decisions will depend on economic data, which indicates a cautious approach moving forward.
Economists from the ASEAN+3 Macroeconomic Research Office (AMRO) have also adjusted the Philippines' GDP growth forecast downward, linking it to ongoing challenges such as a graft scandal that has impacted public confidence and overall economic performance. These factors support concerns among investors about the Philippine economic outlook.
In terms of inflation and exchange rate stability, the Department of Budget and Management (DBM) has projected a stable PHP against the US dollar in the range of P56 to P58 from 2025 to 2028. This projection hinges on maintaining low domestic inflation rates and favorable global financial conditions.
Analyzing recent trading data shows that the PHP to USD rate is currently near 30-day lows at approximately 0.016859, only 0.9% below its three-month average. The peso has exhibited stable trading patterns, ranging from 0.016845 to 0.017228 over the last few months.
The PHP to EUR pair stands at 0.014495, slightly below its three-month average, while the PHP to GBP has dipped 1.6% from its average, reflecting the ongoing volatility in the currency market. However, the PHP to JPY has shown some strength, trading 1.0% above its three-month average.
Overall, the peso may experience some modest strengthening in the first half of 2026 if governance reforms are effectively implemented and investor confidence is restored. Businesses and individuals engaging in international transactions should stay alert to these developments as they could significantly impact exchange rates and currency valuation in the coming months.
