Japanese financial giant MUFG Bank Ltd. believes the Philippine peso could gain modest support from the United States’ (US) decision to exempt certain Philippine agricultural exports from the 19-percent tariff US President Donald Trump imposes.

Michael Wan, senior currency analyst at MUFG Global Markets Research, said in a Nov. 17 commentary that the recent tariff exemptions on exports bound for the US could “provide some relief to both the Philippine peso and Indonesian rupiah at the margin, especially given uncertainty around the conclusion of trade deals for both.”

To recall, Trump exempted certain key agricultural imports—such as coffee, cocoa, bananas, beef, and other food products—which, for Wan, suggests that the tariffs may be having a greater negative impact on US consumers and important constituencies than the administration publicly acknowledges.

Of the Philippine food and agricultural exports, vegetable oils—including coconut oil—account for around four percent of US imports from the Philippines; cereals and milling products, one percent; and coconuts, bananas, and other fruits, about 0.6 percent.

Overall, tariff-exempt exports to the US account for about six percent of the Philippines’ total shipments.

“From a foreign exchange (forex) perspective, however, the bigger macro driver for both the peso and rupiah is still domestic issues, including fiscal uncertainties in Indonesia and corruption issues around flood control projects and the negative spillovers to government spending in the Philippines,” Wan noted.

It can be recalled that the peso hit a new all-time low last Nov. 12, closing at ₱59.17 per US dollar, surpassing the previous record of ₱59.13:$1 set on Oct. 28. This was attributed to the market turning downbeat due to public fund governance concerns and lackluster economic growth.

Despite its recent lows, Wan remains a bit bullish on the local currency against the dollar, which currently moves within the ₱59:$1 territory.

“[MUFG looks] for the peso to come off gradually toward the ₱58:$1 mark, helped over time by a weaker dollar and also some eventual improvement in government spending from the first half of 2026,” Wan said.

As per MUFG’s report last week, the bank expects the peso to settle at a slightly stronger level of ₱58.7:$1 by the end of the fourth quarter, before stabilizing at the ₱58:$1 level through the second quarter of next year and slipping again to ₱58.5:$1 in the third quarter of 2026.

MUFG had said the sharp slowdown in gross domestic product (GDP) growth to four percent in the third quarter reinforces the Bangko Sentral ng Pilipinas’ (BSP) confidence to further adjust key interest rates lower.

It expects that, with an “accommodative policy,” the BSP will again reduce the policy rate to 4.5 percent, from 4.75 percent at present, at the Monetary Board’s (MB) final policy meeting for the year in December.