Manila: The peso gained further on Monday (April 7), opening at ₱56.852 against the US dollar, in a show of further strengthening.
The Philippine currency is up nearly 4 per cent since November 2024, bringing the peso-dollar rate closer to year-ago levels.
Data from the Bangko Sentral ng Pilipinas (BSP) shows the Philippine currency has been on the upswing against the greenback since November 27, 2024, when it touched ₱58.992 against the dollar).
The exchange rate has been relatively stable in the last 12 months, hovering between ₱55 and upper ₱58.
In general, a stronger peso means less pesos for every dollar sent by overseas Filipino workers, or those earned by the countrys business process outsourcing industry.
If an OFW sends $100, and the exchange rate is ₱58/USD, the family receives ₱5,800.
If the exchange rate strengthens to ₱55/USD, the family receives ₱5,400. That’s a ₱400 decrease — the same dollars sent, but fewer pesos received.
Guarding against inflation
Recently, the peso’s further strengthening has followed a revelation by the BSP chief that they intervene in the market when necessary in order to keep local inflation, the rate of increase in the prices of goods and services, in check.
The peso closed higher closing last week at Php57.176 (Friday, April 4), as it opened at ₱56.95, stronger than its Thursday kick-off at ₱57.25 to the dollar.
BSP Governor Eli Remolona recently said that the BSP has been watching the peso, adding that “we don’t want it to depreciate too sharply… we occasionally intervene.”
The BSP chief, however, said that the central bank has been intervening “less” in the currency market, even as the monetary board also appears on track to resume rate cuts in April.
Economists say the peso’s latest close was a “good signal” that it has stabilised.
Impact on OFW Families
A stronger pesos, in general, reduces buying power of those earning in (or remitting) US dollars.
OFW families may feel the pinch, especially those who rely heavily on remittances for basic needs, education, or healthcare.
It could also exert some pressure on OFWs, as some may feel the need to send more dollars to compensate for the lower peso value, which can strain their finances abroad.
Remolona anticipates that the Monetary Board (BSP’s monetary policy-making body), will “to cut a few more times” this year, saying a reduction is “on the table” during the rate-setting meeting on April 10, 2025.
Philippine stocks, meanwhile, dropped nearly 3.53 per cent as the market index tumbled to 5,845.37 early on Monday, following the global stocks rout.
The across-the-board slide hit industries (Financials, -4.36%; Industrial, -3.48%; Holding Firms, 3.68%; Property, -2.70%; Services, -4.21%; Mining & Oil, -6.54%) due to the uncertainty over the knock-on effects of “Liberation Day”, slapping sweeping tariffs on its trading partners announced by US President Donald Trump on April 2, 2025.
