Malacañang said the weakening of the Philippine peso against the US dollar is being driven by a combination of global and domestic factors.
Palace Press Officer Claire Castro explained that the Department of Economy, Planning, and Development (DepDev) identified the continued strengthening of the US dollar as one of the primary reasons behind the peso’s decline. According to the Palace, the stronger dollar has encouraged investors to shift capital toward the United States and away from emerging markets such as the Philippines.
Castro also cited rising global oil prices as another contributing factor. Higher oil prices increase the country’s demand for US dollars because the Philippines relies heavily on imported fuel. As the need for dollars grows to pay for these imports, pressure is placed on the local currency.
Malacañang explained that when demand for US dollars becomes higher than its supply, the peso weakens. The supply of dollars typically comes from sources such as export earnings, remittances from overseas Filipino workers, and foreign investments entering the country.
Despite the currency movement, the Palace stressed that the Bangko Sentral ng Pilipinas (BSP) has the legal mandate to maintain currency stability. Officials said the central bank has sufficient policy tools to manage excessive fluctuations in the peso’s value.
These tools include the use of foreign exchange reserves and adjustments to interest rates when necessary. According to Malacañang, such measures are available to help prevent sharp or unstable movements in the local currency.
The Palace maintained that the peso’s performance reflects broader global market trends and economic conditions affecting emerging economies.
