Makati city: As a service-led economy, the Philippines has leeway not to defend the peso against a strengthening US dollar, although the Bangko Sentral ng Pilipinas (BSP) intervenes to manage volatility, its chief said. "The economics doesn't warrant it," BSP Governor Eli Remolona told journalists after speaking at a Rotary Club event.

According to Philippines News Agency, the peso is currently trading at the 59-level against the US dollar. In 2025, it has weakened by about 1.6 percent after closing at 58.79, compared with 57.84 at end-2024. Remolona stated that there is "tremendous pressure to defend the peso," but the central bank chooses to ignore it. "I feel the pressure, but the economics of it is we shouldn't," he said.

Remolona highlighted that other export-led Asian economies "like to purposely weaken their currency." However, he assured the public that the BSP steps in to address excessive volatility in the market. A weaker peso increases the value of remittances, benefiting families of overseas Filipino workers (OFWs) and the business process outsourcing (BPO) sector, which in turn supports domestic consumption.

Domestic consumption accounts for about 70 percent to 76 percent of the country's economic output.