The Philippine peso continues to demonstrate strength, partly due to the relatively weaker impact of U.S. tariffs, according to a recent report from Sumitomo Mitsui Banking Corporation (SMBC), based in Singapore.
SMBC’s latest brief highlighted that while the performance of various Asian currencies has been mixed, the Philippine peso (PHP) and the Malaysian ringgit (MYR) have both appreciated. The report noted that foreign inflows into the stock markets have played a role in supporting the MYR. Meanwhile, the PHP has remained robust, as the tariff impact on the Philippine economy and markets is expected to be less significant compared to other Asian economies.
On Monday, the peso closed at P56.42 to the U.S. dollar, showing a slight weakening from the previous day. However, it remained within the P56 to the dollar range for eight consecutive days, which indicates a relatively stable level for the currency.
SMBC noted that “the expected progress in tariff negotiations, especially with U.S. Treasury Secretary Janet Yellen’s leadership, could offer more room for the gradual appreciation of Asian currencies against the U.S. dollar.” This outlook suggests that the current tariff negotiations, if favorable, could create more favorable conditions for Asian currencies to continue their gradual appreciation.
In terms of trade, preliminary data from the Philippine Statistics Authority (PSA) revealed that Philippine merchandise exports to China amounted to $9.44 billion in 2024, while exports to Hong Kong reached $9.6 billion. This further indicates that despite challenges, the Philippines is maintaining a strong trade relationship with major partners.
Philexport President Sergio R. Ortiz-Luis Jr. also pointed out that the Philippines should prioritize resolving domestic issues such as red tape, corruption, and market access challenges. He argued that these issues are more pressing than merely negotiating tariff concessions with the U.S. government.
While the outlook for Asian currencies remains uncertain, SMBC’s report suggests that favorable conditions could allow for a continued gradual appreciation of these currencies, including the peso, against the U.S. dollar.
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