Why Is the Philippine Peso So Weak and Who Benefits?

In early January, the Philippine peso slid to 59.38 per dollar — its weakest level on record. While it has since recouped some losses, officials have signaled a tolerance for further depreciation and traders are watching closely for any signs of central bank intervention.

A weak peso is a double-edged sword for the Philippines. It could boost remittance flows from the millions of Filipinos who live overseas and send money home, potentially encouraging higher spending in the consumption-driven economy. But it could also push inflation higher as imports become more expensive. The Philippines is also one of Asia’s most active sovereign bond issuers, and prolonged peso weakness would drive up government borrowing costs and risk further inflating the national debt.