BSP Maintains Calm as Peso Weakens, While Businesses Sound Alarm on Inflation Risks
The Bangko Sentral ng Pilipinas (BSP) has expressed no alarm over the Philippine peso weakening to approximately P60 per US dollar, despite growing concerns from business groups that the currency's decline is already inflating the costs of goods and services across the nation. In a virtual press briefing held on Thursday, March 26, 2026, BSP Governor Eli Remolona Jr. emphasized that the weaker peso has not yet triggered serious inflationary pressures and could, in fact, bolster export earnings by making Philippine products more affordable for international buyers.
Central Bank's Stance on Currency Intervention
Governor Remolona clarified that the BSP does not aim to fix the peso at a specific exchange rate. Instead, the central bank intervenes only to moderate excessive fluctuations that could destabilize inflation. "We don't intervene to maintain a level for the peso," Remolona stated. "We intervene to dampen swings that could affect inflation." This approach allows the currency to adjust naturally, provided that price increases remain within manageable bounds, reflecting a strategy focused on long-term economic stability rather than short-term fixes.
Business Groups Highlight Immediate Impacts
Contrasting the BSP's relaxed outlook, the Cebu Chamber of Commerce and Industry (CCCI) reported that many businesses are already grappling with the peso's depreciation. Companies reliant on imports—such as those in fuel, raw materials, and equipment sectors—are facing heightened expenses, which are being transferred to consumers through elevated fuel prices, increased transport fares, and costlier basic goods. "These increases are placing added pressure on both businesses and households," the CCCI noted, warning that if the peso weakens further, particularly beyond P62 per dollar, price hikes could become more widespread and dampen consumer spending.
In response, business groups are advocating for a coordinated effort to mitigate the weaker currency's effects. The CCCI has urged the government to sustain prudent macroeconomic policies, address elevated energy costs, and support vulnerable sectors, while encouraging firms to enhance efficiency and adopt robust risk management measures. Similarly, Barbara "Bambi" Gothong-Tan, president of the Mandaue Chamber of Commerce and Industry, highlighted the country's import dependency, stating that a weaker peso escalates costs for essential items like fuel and food.
Balancing Benefits and Challenges
While the BSP acknowledges that inflation remains within acceptable levels for now, with its internal "warning levels" for currency-induced inflation not yet breached, it also recognizes the dual nature of a weaker peso. On one hand, exporters, information technology-business process management firms, and households receiving remittances stand to gain, as the currency depreciation boosts their earnings in peso terms, potentially supporting domestic consumption. On the other hand, these benefits may be offset by global uncertainties and persistent price rises that erode purchasing power.
The CCCI summarized the situation as not yet a crisis but a critical signal for proactive measures. "The situation is not yet a crisis, but it is a signal for us to act early and work together to protect the economy," the chamber asserted. As the BSP continues to monitor the exchange rate's impact, businesses stress the importance of early intervention to forestall more severe economic disruptions, underscoring the need for collaborative strategies between the public and private sectors.
