In a significant statement, the governor of the Bangko Sentral ng Pilipinas (BSP) has clarified the central bank's stance on the Philippine peso's current performance against the US dollar. Speaking in Makati City, Governor Eli Remolona asserted that the economic fundamentals of the country do not justify a forceful defense of the local currency's value.
The Economic Rationale Behind the Stance
Governor Remolona made these remarks on Thursday, January 9, 2026, following an event with the Rotary Club. He acknowledged facing "tremendous pressure to defend the peso" but stated the central bank consciously ignores such calls. "I feel the pressure, but the economics of it is we shouldn't," Remolona told journalists. He emphasized that as a service-led economy, the Philippines has the leeway to adopt this position, unlike other export-driven Asian nations that often prefer a weaker currency to boost their overseas sales.
Current Peso Performance and BSP Intervention
The Philippine peso is currently trading at the 59-level against the US dollar. This represents a continued weakening trend from the end of 2024. Data shows the currency has depreciated by approximately 1.6 percent in 2025, moving from a closing rate of 57.84 at the end of December 2024 to 58.79 at the close of 2025.
While the BSP is not actively defending a specific peso level, Governor Remolona provided a crucial assurance. He confirmed that the central bank intervenes in the foreign exchange market to manage and smooth out excessive volatility. This means the BSP steps in to prevent sharp, disorderly swings in the exchange rate that could destabilize the financial market.
Silver Lining: Benefits of a Weaker Peso
The BSP chief highlighted a key upside to the peso's current level. A weaker peso actually increases the Philippine peso value of foreign currency inflows, which directly benefits two critical pillars of the domestic economy:
- Overseas Filipino Workers (OFWs): Families receiving remittances get more pesos for every dollar sent home, boosting their household spending power.
- Business Process Outsourcing (BPO) Sector: The industry earns in US dollars but pays expenses in pesos, improving its profitability and capacity to hire.
This increased income for millions of families and one of the country's largest job creators ultimately fuels domestic consumption. Consumer spending is the primary engine of the Philippine economy, accounting for an estimated 70 percent to 76 percent of the country's total economic output.
Governor Remolona's comments signal a pragmatic approach from the central bank, prioritizing overall economic stability and the welfare of key sectors over artificially propping up the currency. The BSP's role, as outlined, is to curb harmful volatility while allowing market forces to reflect the nation's economic structure.
