Peso Holds Steady, No Further Depreciation to 60 Seen
The Philippine peso ended nearly flat against the US dollar for a second straight day on Wednesday, November 20, 2025, with analysts projecting it will not weaken further despite recently touching the 59-level. The outlook was shared during the Makati Business Club's year-end review and 2026 outlook event, 'Beyond the Numbers,' held in Makati City.
HSBC's Economic Outlook: Stability at 58-Level
Corrie Purisima, Treasurer and Head of Markets and Security at HSBC, presented the bank's analysis, citing their economist's view. HSBC expects the Philippine peso to average at the 58-level against the US dollar for both 2025 and 2026. Purisima stated, 'We don't expect it for now to reach 60.'
The primary reason cited for this stability is an anticipated decline in importations, linked to a slowdown in infrastructure spending. 'That should provide some comfort, lower imports, less pressure on the currency,' she explained.
This projected dip in imports is expected to be balanced by strong and stable inflows from two key sources:
- Remittances from the Business Process Outsourcing (BPO) sector, estimated at US$35 billion to $36 billion.
- Remittances from Overseas Filipino Workers (OFWs).
Balancing Forces: BSP Policy and US Fed Influence
Despite the positive factors, the peso still faces pressures. Purisima pointed to the dovish stance of the Bangko Sentral ng Pilipinas (BSP), which is eyeing further cuts to its key policy rates. The market anticipates a 25 basis point cut next month and another 25 basis points in 2026.
However, a counterbalancing upside risk comes from the US dollar's strength. There is a lesser probability that the US Federal Reserve will cut the Fed Funds rate due to persistent inflation. 'So, that should balance overall, and we do see it for now ending at 58 for this year,' Purisima concluded.
Adding to the discourse at the same event, Ayala Corp. Managing Director Karl Chua supported the BSP's policy of allowing market forces to dictate the peso's path. 'I think it is a good policy to keep it at a free flow and to be determined by supply and demand,' Chua said. He emphasized that while exporters and importers may be affected, the real exchange rate, adjusted for inflation and productivity, is the more critical metric.
In a separate statement, Nicholas Mapa, Chief Economist and Market Strategist at Metropolitan Bank & Trust Company (Metrobank), noted his expectation for a generally weak US dollar until 2026 due to the Fed's rate-cutting cycle. However, he warned that Philippine-specific factors, including a projected current account deficit in 2026 and 2027, would sustain pressure on the Philippine peso.
