Japanese financial giant MUFG has forecast the Philippine peso to fare steadily against the United States dollar through the second quarter of 2026, as the latter bears the brunt of U.S. President Donald Trump’s attack on the Federal Reserve’s independence.

MUFG projected the peso’s current strength at a spot rate of ₱57.12 versus the U.S. dollar to sustain its momentum over the next four quarters.

In particular, it sees the local currency trading with the greenback at ₱57: $1 by the end of September this year, ₱56.5:$1 by December, before settling at ₱56:$1 through the first half of next year.

“We have adjusted our Philippine peso forecast slightly stronger and see the U.S. dollar-peso moving toward the ₱56: $1 levels (from ₱56.5:$1 previously),” the bank said in a commentary published Monday.

Rather than domestic factors, MUFG cited global developments as the main contributor to the continued modest appreciation of the peso.

It noted that the G-10 anticipates “more U.S. dollar weakness with increasing concerns around President Trump’s attack on Fed independence.”

The G-10 is made up of 11 advanced economies—including the U.S., the U.K., Japan, Germany, France, Italy, Canada, Belgium, the Netherlands, Sweden, and Switzerland—that regularly meet to discuss and coordinate on global financial issues.

Last month, the peso appreciated against the U.S. dollar, moving to ₱57.12:$1 from ₱58.3:$1.

“From a domestic perspective, many of the positive factors we mentioned have not changed, and as such, we remain comfortable in our view for the Philippine peso to strengthen modestly against the dollar,” MUFG said.

Hikes in consumer prices are projected by the bank to remain “manageable, driven by lower domestic rice prices, good global rice supplies, coupled with low upside risks to transport fares and electricity prices.”

To recall, the steepest drop in rice prices since 1995 slowed July inflation to 0.9 percent, its lowest in nearly six years.

Additionally, MUFG expects actual foreign direct investments (FDI) “to improve, reflecting the surge in FDI approvals already seen, especially in the renewable energy space.”

“Third, the pipeline of public and private infrastructure projects remains strong. The recent temporary ban on rice imports is a key risk, but with domestic rice inventories still high, the impact should be manageable,” the bank said.