The further interest rate cuts anticipated from the Bangko Sentral ng Pilipinas (BSP) may slightly weaken the peso to beyond the mid-₱56 level this year, according to consensus forecasts collected by the Barcelona-based FocusEconomics.

In its June 2025 consensus forecast report for the Philippines, a copy of which was obtained by Manila Bulletin last week, FocusEconomics said the peso is expected to close the year at ₱56.73:$1.

"The peso should depreciate from current levels by the end of this year as monetary policy easing continues," FocusEconomics said. The peso is currently trading at the ₱55:$1 level.

"That said, a strong domestic economy will lead to a year-on-year appreciation of the Philippine peso," it added, as the peso settled at the ₱57:$1 level last year.

For FocusEconomics, "surging safe-haven demand and higher-for-longer United States (US) rates are depreciatory risks" for the peso, such that the local currency is seen ending 2026 at ₱56.69:$1, only a slight appreciation from its 2025 forecast.

Across the economists polled by FocusEconomics, forecasts for the BSP's further monetary policy easing varied from an additional 25 basis points (bps) to as much as 100 bps of cuts in key interest rates before the year ends.

These forthcoming rate reductions, coupled with expectations of headline inflation averaging a manageable 2.5 percent this year, would allow the Philippine economy to "remain among ASEAN's [the Association of Southeast Asian Nations] top performers in 2025, broadly maintaining its 2024 pace," FocusEconomics said.

Its consensus gross domestic product (GDP) growth forecast for 2025 has been lowered to 5.7 percent, down by 0.1 percentage point (ppt) from the previous projection and below the government's more ambitious six- to eight-percent target.

"Election-related spending should buoy domestic demand, and the economy's relatively smaller exposure to the global tariff war will protect exports. Weaker-than-expected external demand is a downside risk," FocusEconomics said.

It said the spending boost from the recently concluded midterm polls would also support second-quarter GDP expansion despite the political risks emanating from the election results.

"Turning to the second quarter, our panelists have penciled in a further improvement in annual GDP growth on the back of lower interest rates, muted inflation and export frontloading ahead of US tariff hikes," it said.

"In politics, the Philippines held midterm elections on May 12 that saw President Ferdinand Marcos Jr. lose support in the Senate to Vice President Sara Duterte, which could jeopardize Marcos' fiscal reforms," it added, even as it expects the current administration to continue prioritizing anti-inflationary measures as well as the rollout of big-ticket infrastructure projects to sustain economic growth.

For the rest of the year, FocusEconomics said Philippine growth "is set to accelerate from the first quarter's level, with private spending likely to remain a bright spot," adding that "public stimulus measures, low inflation and ongoing interest rate cuts should encourage household consumption, outweighing downside pressures from a weakening external panorama."