The Philippine peso surged to ₱55.493 per US dollar on Monday, marking its strongest level in nearly two years. This rise reflects investors’ confidence in policy continuity despite a recent Cabinet reshuffle. Meanwhile, the US dollar continued its downward trend amid growing concerns about America’s fiscal deficit.
The peso averaged ₱55.659 per dollar in May 2025, a 5.1% increase compared to last year’s average. This appreciation means overseas Filipino workers (OFWs) receive ₱3,037 less for every $1,000 sent home. The Asian currency’s gain is fuelled by weak US economic indicators and low crude oil prices benefiting the Philippines as a fuel importer.
Philippine peso Impact on OFWs
For OFWs, the peso’s strength means a smaller amount of local currency upon converting their hard-earned dollars. Every $1,000 remitted now translates to ₱3,037 less than it would have a year ago. This change affects families relying on remittances for daily expenses and savings.
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The Bangko Sentral ng Pilipinas (BSP) indicated earlier this month it would likely avoid market intervention to curb the peso’s appreciation. The central bank’s stance reflects confidence in the currency’s stability and the country’s economic fundamentals. Investors have responded positively to this signal.
Policy Continuity Reassures Investors Amid Cabinet Shakeup
President Ferdinand Marcos Jr. maintained key economic officials despite a broad Cabinet reshuffle. This decision reassured investors about the government’s commitment to steady economic policies. Core officials retained include Finance Secretary Ralph Recto and Trade Secretary Cristina Roque, ensuring policy stability.
After 52 officials submitted resignations following the President’s directive, Marcos Jr. chose to keep his full economic team. National Economic and Development Authority Secretary Arsenio Balisacan and Budget Secretary Amenah Pangandaman also remain. This move reassures markets despite political changes.
Low Crude Oil Prices Support Philippine Economy
The Philippines, as a net fuel importer, benefits from sustained low crude oil prices. This helps narrow the nation’s balance-of-payments deficit and strengthens the peso. The favourable oil prices add to the peso’s resilience amid global economic uncertainties.
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Despite the peso’s strength, concerns linger due to the country’s slower economic growth. The Philippines posted 5.4% growth in the first quarter of 2025, below economists’ expectations. This underperformance highlights challenges the economy faces, including impacts from the US tariff shock.
Conclusion
The Philippine peso recent appreciation signals investor confidence but also reduces the peso value OFWs receive for their dollar remittances. While policy continuity and favourable oil prices support the currency, growth concerns remain significant. The government and BSP face a delicate balance in maintaining currency stability amid these challenges.
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