How Filipinos will be affected by the weakening peso

MANILA — The peso continues to weaken versus the dollar, and this will have a huge impact on consumers, businesses and the government. 

According to the Bankers Association of the Philippines, the peso closed at a fresh record low of 64.17 to the dollar.

When the peso depreciates, ordinary households feel it primarily through higher prices. Because the Philippines relies heavily on imports for energy, raw materials, and agricultural commodities, a weaker peso trickles down into daily living costs.

The Philippines imports almost all of its petroleum and a large portion of the coal used for power generation. A weaker peso makes oil imports more expensive in local currency terms, pushing up prices at the pump, public transport fares, and monthly electricity bills.

Imported staples such as rice and agricultural inputs like fertilizers become more costly. This affects the prices of directly imported foods like wheat and flour for bread, and processed goods. Locally produced foods may also get more expensive as farmers and livestock raisers face higher costs for imported fertilizers, animal feed, and fuel.

To temper the peso’s depreciation and tame imported inflation, the Bangko Sentral ng Pilipinas (BSP) may maintain higher interest rates or delay rate cuts. This raises borrowing costs for personal loans, housing mortgages, and car financing.

Servicing the national government’s foreign-denominated debt requires more pesos. Over time, higher debt servicing obligations can squeeze funds available for public infrastructure, social welfare programs, and public healthcare.

Some sectors may see some benefit from a weaker peso.

Families receiving remittances in foreign currencies—like the US dollar, euro, or even Middle Eastern currencies— receive more pesos for every dollar sent. 

However, domestic price increases for food, utilities, and tuition often erode these gains, meaning the net boost to real purchasing power is limited.

Industries that earn in dollars but pay operating costs in pesos—such as Business Process Outsourcing (IT-BPM) companies, electronics manufacturers, and local exporters—gain a cost competitiveness edge. This can help preserve jobs or allow room for wage adjustments in export-oriented sectors.

Traveling abroad becomes significantly more expensive for local families, encouraging more domestic travel, which benefits local hospitality businesses. 

A weaker peso also makes the country more attractive to tourists from the US, Europe and more developed countries that have stronger currencies.