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Manila Bulletin devider Business devider Banking & Finance devider Philippine peso seen appreciating over next 5 years

Philippine peso seen appreciating over next 5 years

Published Aug 29, 2025 03:38 pm

At A Glance

  • Singapore-based DBS Bank has forecast the Philippine peso to firm to the ₱56 level against the United States (US) dollar by year-end, appreciate further to the ₱55:$1 level by the end of Ferdinand Marcos Jr.'s administration in 2028, and reach its strongest at ₱54:$1 by end-2030.
Singapore-based DBS Bank has forecast the Philippine peso to firm to the ₱56 level against the United States (US) dollar by year-end, appreciate further to the ₱55:$1 level by the end of Ferdinand Marcos Jr.’s administration in 2028, and reach its strongest at ₱54:$1 by end-2030.
Based on the bank’s report published Thursday, Aug. 28, DBS senior foreign exchange (forex) strategist Philip Wee and forex and credit strategist Chang Wei Liang forecast the peso to appreciate further against the US dollar in the coming months and sustain this momentum over the next five years.
To recall, the peso traded at ₱57.3 versus the greenback at the end of March, before strengthening to ₱56.3:$1 by the end of June. Wee and Liang projected the peso to weaken slightly to ₱56.7:$1 by the end of September, but regain strength at ₱56.3:$1 by year-end.
Specifically, Wee and Liang see the local currency trading at ₱54.4:$1 by the end of 2026, ₱55.3:$1 in 2027, ₱55:$1 by the end of the Marcos administration, ₱54.5:$1 in 2029, and ₱54:$1 in 2030.
Given the forex movements after the monetary policy easing, BSP Governor Eli M. Remolona Jr. asserted that the central bank does not target the exchange rate.
“We just try to keep it stable. So far this year, the peso has appreciated against the US dollar. But that’s not by design. That’s just what the market is doing,” Remolona said in a Bloomberg interview on Friday, Aug. 29.
On Thursday, Aug. 28, the peso appreciated against the US dollar, closing at ₱57.12 from ₱57.16 last Wednesday. The peso hit an intraday high of ₱56.93 and a low of ₱57.17, after opening at ₱57.05, according to the Bankers Association of the Philippines (BAP).
Total trading volume declined to $1.86 billion from Wednesday’s more than $1.9 billion.
Michael Wan, senior currency analyst at Japanese financial giant MUFG Bank, Ltd., has projected the US dollar-peso forex rate to decline to the ₱56.5:$1 level over time.
“From an [forex] perspective, we are biased to see the US dollar-peso moving lower to the ₱56.5:$1 handle over time, on the back of benign inflation, higher FDI [foreign direct investment] inflows, and strong infrastructure,” Wan said in commentary published on Thursday, Aug. 28, after the central bank’s latest policy easing to five percent.
To note, inflation reached its near six-year low in recent months, with the July headline print falling to below one percent.
Foreign direct investment (FDI) inflows into the Philippines jumped 21.3 percent to $586 million in May from $483 million a year earlier, the BSP reported two weeks ago, citing stronger investor confidence.
For 2025 alone, the projected lower US dollar-peso forex rate by DBS is placed side by side with a gross domestic product (GDP) growth projection of 5.6 percent, slower than 2024’s economic output growth rate of 5.7 percent. However, it can be noted that the forecast figure still falls within the government’s downscaled growth target of 5.5 percent to 6.5 percent.
Notably, the growth forecast for next year at 5.5 percent is seen to fall significantly short of the revised target of six percent to seven percent.
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