Philippine Peso Gains on Record Remittances

The Philippine peso jumped nearly 1% to around 57.5 per dollar on Feb. 23, reaching its strongest level in five months and outperforming regional peers as the dollar weakened broadly amid renewed US tariff uncertainty. On Saturday, US President Donald Trump said he would raise the 10% global levy announced a day earlier to 15%, following the US Supreme Court's decision to strike down his sweeping reciprocal tariffs. The peso also drew support from stronger capital inflows, with the benchmark PSE Index climbing toward its highest level in more than a year as concerns over large-scale government corruption receded. Last week, the Bangko Sentral ng Pilipinas delivered its sixth consecutive rate cut to cushion an economy strained by the corruption scandal, though policymakers are now expected to keep rates unchanged for the remainder of the year. Meanwhile, local firms are reportedly stepping up efforts to limit FX risks with currency hedging strategies as the peso has become volatile.

The Philippine peso strengthened past 58 per dollar in mid-February, reaching its firmest level in over four months as the country recently reported record cash remittances for December and full-year 2025. Remittances rose 4.2% YoY to an all-time high of $3.52 billion in December. For 2025 as a whole, inflows increased 3.3% to a record $35.63 billion, equivalent to 7.3% of GDP and 6.4% of GNI, underscoring the sector’s structural importance to external accounts and domestic consumption. The US remained the largest source of remittances, accounting for 39.7% of total flows, followed by Singapore (7.3%), Saudi Arabia (6.6%), and Japan (5%). The peso also drew support from renewed foreign interest in domestic assets, with the benchmark PSEi up roughly 14% from its November low, when a major corruption scandal unsettled markets. The rebound has helped restore investor confidence, enabling the government to return to large-sized bond issuance for the first time since April last year.

The Philippine peso strengthened toward 58 per dollar in mid-February, hitting its strongest levels since October after sinking to record lows in January. The currency has been supported by renewed capital inflows and a rally in local equities, with foreign investors buying about $266 million of Philippine stocks so far this year. The benchmark PSE Index is up roughly 8% year-to-date, nearing its highest level in a year. The gains follow stepped-up government efforts to restore business and investor confidence after a major corruption scandal triggered capital outflows late last year. The peso was also buoyed by expectations that the Philippine central bank is nearing the end of its easing cycle, after consumer inflation accelerated to the 2% target in January.