As a service-driven economy, the Philippines has room to let the peso move freely even as the US dollar gets stronger, according to the country’s central bank chief. While the Bangko Sentral ng Pilipinas (BSP) steps in to smooth out sharp swings, it doesn’t see the need to aggressively defend the currency.
“The economics doesn’t warrant it,” BSP Governor Eli Remolona told reporters after speaking at a Rotary Club event in Makati City on Thursday.
The peso is now trading at the 59 level against the US dollar. So far in 2025, it has slipped by around 1.6 percent after ending at 58.79, compared with 57.84 at the close of 2024.
Remolona said there is “tremendous pressure to defend the peso,” but the central bank chooses not to give in.
“I feel the pressure, but the economics of it is we shouldn’t,” he said.
He added that other export-driven Asian economies often “purposely weaken their currency” to stay competitive.
Still, Remolona assured the public that the BSP remains active in the market to prevent excessive volatility.
A weaker peso boosts the value of dollar remittances, helping families of overseas Filipino workers (OFWs) and supporting the business process outsourcing (BPO) industry—both of which fuel spending at home.
Domestic consumption makes up roughly 70 to 76 percent of the country’s total economic output.
PIXABAY PHOTO