AS A service-led economy, the Philippines has leeway not to defend the peso against a strengthening US dollar, although the Bangko Sentral ng Pilipinas (BSP) intervenes to manage volatility, its chief said.
“The economics don’t warrant it,” BSP Gov. Eli Remolona told journalists after speaking at a Rotary Club event in Makati City on Thursday.
The peso is currently trading at the 59-level against the US dollar. In 2025, it has weakened by about 1.6 percent after closing at 58.79, compared with 57.84 at end-2024.
Remolona said there is “tremendous pressure to defend the peso,” but the central bank ignores it.
“I feel the pressure, but the economics of it is we shouldn’t,” he said.
He said other export-led Asian economies “like to purposely weaken their currency.”
However, Remolona assured the public that the BSP intervenes in the market to address excessive volatility.
A weaker peso increases the value of remittances, benefiting families of overseas Filipino workers and the business process outsourcing sector, which in turn supports domestic consumption.
Domestic consumption accounts for about 70 percent to 76 percent of the country’s economic output. / PNA