Philippine Peso Hovers Near 5-Month High

The Philippine peso held steady at 57.5 per dollar, hovering near a five-month high, supported by foreign inflows into the equity market and a softer US dollar. Investors have channeled funds into local stocks for two consecutive months, marking a notable turnaround after eight years of net outflows, with the benchmark PSE Index rising at its highest level in over a year. The currency also benefitted from a weaker greenback amid renewed uncertainty over US President Trump’s tariff policy. However, the peso’s upside was capped by expectations of further monetary easing by the Bangko Sentral ng Pilipinas. Last week, the BSP delivered its sixth consecutive rate cut to support an economy still strained by the corruption scandal. Analysts currently expect an additional 25-basis-point reduction by year-end. So far this year, the peso has risen 2%, its strongest performance since early 2012.

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.