MALACAÑANG on Wednesday, Dec. 10, 2025, said it is closely coordinating with the Bangko Sentral ng Pilipinas (BSP) and the country’s economic team to address the peso’s continued depreciation, after the local currency hit a new all-time low of P59.22 against the US dollar.
Palace Press Officer Claire Castro said the matter will be tackled in a meeting scheduled on Thursday, Dec. 11.
“We are working with the BSP and the economic team. At bukas po magkakaroon sila ng meeting (We are working with the BSP and the economic team, and they will meet tomorrow),” she said when asked about the Palace’s reaction to the peso’s fresh record low.
The central bank’s policy-making Monetary Board will also have its last rate setting for the year on Thursday.
Analysts have attributed the peso’s weakness to a stronger US dollar and softening local confidence.
Asked whether the administration is concerned that the weaker peso may further push up inflation ahead of the holiday season, Castro said the issue will be raised during the meeting.
“Tignan po natin. Malamang ay matatalakay ito bukas (We’ll see. This will likely be discussed tomorrow),” Castro said.
What a weaker peso means for the Philippine economy
Here’s what the depreciation means for consumers, businesses and government finances.
1. Higher prices and stronger inflation pressures
A weaker peso makes imported goods more expensive — from fuel and electricity to food and manufacturing inputs. This raises overall inflation and may force the Bangko Sentral ng Pilipinas to keep interest rates high.
2. Cost of living rises for households
Imported goods such as rice, meat, fuel, gadgets and appliances become pricier. Transport fares and utility costs may increase, squeezing purchasing power, especially for low- and middle-income families.
3. Government and corporate debt becomes more expensive
Both the public and private sectors carry dollar-denominated debt. When the peso weakens, the cost of repaying these debts rises, pressuring the national budget and corporate balance sheets.
4. Trade deficit could widen
The Philippines imports more than it exports, particularly oil and food. A weaker peso inflates the cost of these imports, which can widen the trade deficit and strain the country’s external accounts.
5. Some winners: OFW households and exporters
Remittances sent in dollars or other foreign currencies translate to more pesos, boosting household spending. Exporters may gain from improved price competitiveness, though many still rely on imported materials, limiting the net benefit.
6. Businesses face higher operating costs
Import-reliant industries — manufacturing, construction, energy and transport — are hit hardest. The depreciation raises their input costs and may delay expansion plans or push companies to raise prices.
7. Economic growth may lose momentum
With inflation rising and consumer purchasing power eroding, demand may soften. Higher debt-servicing burdens and weaker business sentiment could further slow economic activity.
8. Market sentiment turns cautious
A record-low peso can signal vulnerabilities in the country’s external position and deter foreign investors. This may lead to more volatility in financial markets and higher risk premiums./ PNA