The tourism industry in Cebu could become one of the biggest beneficiaries of a weaker peso, as foreign travelers gain more spending power and find Philippine destinations increasingly affordable, according to an economist from the University of Asia and the Pacific (UA&P).
Speaking during an economic briefing in Cebu, UA&P economist Winston Padojinog said that while a depreciating peso typically raises concerns over inflation and higher import costs, it also creates opportunities for sectors that earn revenues in foreign currencies, including tourism, information technology-business process management (IT-BPM), and overseas Filipino worker (OFW) households.
With the peso weakening against the US dollar, foreign visitors receive more pesos for every dollar exchanged, effectively lowering the cost of accommodations, dining, transportation, and leisure activities in destinations such as Cebu.
“They will have more pesos for every dollar they bring in. The Philippines becomes less expensive,” Padojinog said.
Arrivals in First Five Months
From January to May 2026, the Philippines welcomed 2.74 million visitors, up 7.51 percent from 2.55 million in the same period last year. The United States was the country’s largest source market with 531,859 arrivals, followed by South Korea with 501,789 and Japan with 226,494.
Particularly notable was the strong recovery of the Chinese market, which posted a 62.79-percent increase in arrivals to 187,478 visitors during the first five months of the year. Arrivals from India also surged 47.24 percent, while Canada, Australia, and Taiwan recorded double-digit growth rates.
Padojinog said the currency advantage could help attract more international travelers as global tourism continues its recovery, providing a boost to hotels, resorts, restaurants, transport operators, and retailers that depend heavily on visitor spending.
Tourism remains one of Cebu’s major economic pillars, supporting thousands of jobs and generating significant revenues for local businesses. A weaker peso could further strengthen the province’s competitiveness against other Southeast Asian destinations vying for foreign tourists.
Other Winners
Beyond tourism, Padojinog said Cebu’s large IT-BPM sector also stands to gain from peso depreciation. Most outsourcing firms earn revenues in US dollars while paying much of their operating expenses, including salaries and utilities, in pesos. As a result, a weaker currency increases the peso value of export earnings and improves the industry’s competitiveness.
Padojinog described the IT-BPM industry as one of the most resilient segments of the Philippine economy, alongside overseas remittances.
Remittances
OFW households likewise benefit from currency depreciation because remittances sent in dollars translate into larger peso amounts for recipients. Padojinog noted that Cebu is particularly well-positioned to capitalize on this advantage due to its substantial remittance inflows and large population of overseas workers.
“You have a lot of dollars coming in,” he said, explaining that households dependent on foreign earnings enjoy greater purchasing power when the peso weakens.
Still, the economist cautioned that the benefits of a weaker currency come with trade-offs.
Trade-Offs
As a highly open economy that relies heavily on imported fuel, food, and industrial inputs, the Philippines remains vulnerable to inflation whenever the peso depreciates. Higher import costs often translate into increased transport, logistics, and utility expenses that are eventually passed on to consumers.
Cebu faces even greater exposure because of its strong trade links and dependence on the movement of goods across the Visayas.
Despite these risks, Padojinog said businesses should not view a weaker peso solely as a negative development. Instead, he said companies in tourism, export-oriented services, and other foreign currency-earning industries should position themselves to take advantage of the opportunities created by a more competitive exchange rate.
“A depreciation is not all that bad,” he said, noting that sectors generating dollar revenues can benefit significantly even as the broader economy grapples with inflationary pressures. / KOC
