Peso to Hold Above P60 Until 2027 Amid Global Economic Uncertainty
The Philippine peso is expected to remain above P60 against the US dollar until 2027 due to domestic economic challenges and potential monetary policy easing, according to a Metrobank research officer. Sophia Therese Bonifacio said that current market sentiment favors the US dollar as a safe-haven asset, driven by elevated inflation and expectations of aggressive Federal Reserve rate increases. This has led to a record-low close of P61.847 against the greenback on July 24.
The country's imports increased by 17.84% to $77.53 billion in the first half of 2026 from $65.79 billion a year earlier, while foreign direct investment (FDI) net inflows plummeted by 58.8% year-on-year to $250 million in April.
However, Metrobank is slightly optimistic on the peso's performance next year due to prospects of a resolution to the Middle East war and expectations that the dollar will lose its momentum as the Fed turns to easing in 2027 after delivering one 25-basis-point hike this year. A formal deal between the US and Iran may stabilize energy markets and bring Brent Crude back to pre-conflict levels.
The peso could also gain ground next year as risk-on sentiment from faster economic growth drives dollar inflows to the country, but lingering economic pressures mean the rebound will likely be gradual and modest.