Peso slips again, breaches ₧57 level T
HE “sweeping tariffs” of United States President Donald Trump has gone on to rattle markets and on Wednesday sent the peso depreciating back to P57 to the greenback. Data from the Bankers Association of the Philippines (BAP) showed the peso closed at P57.085 against the US dollar. This is the weakest the peso traded since June 24 when it closed at P57.16 to the US dollar. The data also showed this is the first time the peso breached the P57 mark this month. Since June 25, the peso has been trading at the P56 level. “Trump’s sweeping tariffs have created uncertainty in global markets,
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TRUMP’S TARIFFS DRIVE INFLATION TO HIGHEST LEVEL SINCE FEBRUARY
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triggering capital flight from emerging market currencies like the peso towards safer assets,” Ateneo de Manila University economist Leonardo Lanzona Jr. told BusinessMirror. “As Trump’s policies can cause disruptions in not only the US itself, the flow of remittances could slow down the flow of remittances to the Philippines as the levies can affect how much overseas Filipino workers can earn. This reduction can weaken the peso’s support,” he also said. Lanzona said a weaker peso could lead to higher import costs for basic needs such as oil and even food prices. This will lead to faster inflation for transportation and energy and commodities like rice.
He added that with this, the Bangko Sentral ng Pilipinas (BSP) may limit its ability to reduce interest rates more aggressively. Again, given the recent policies of the Trump administration, the country may also expect lower remittance by Philippine shipping, caregiving, and service firms that are based in the United States, Lanzona pointed out. Unfortunately, the combination of a weaker peso, lower remittances, lower export earnings, higher prices, and a possible slowdown in consumer spending, could slow down GDP growth. “There seems to be no silver lining here as the Philippines has
never been competitive enough to take advantage of the depreciation,” Lanzona said. Unionbank Chief Economist Ruben Carlo O. Asuncion told this newspaper that the weakening of the peso against the dollar reflects external pressures. Apart from trade policies, the depreciation reflects the sentiment around US developments such as the latest US inflation report, which has pushed expectations of a delay in the Federal Reserve interest rate cut. Asuncion said this delay in US monetary easing leads to a stronger dollar and will weigh on See “Peso,” A2
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BSP NUDGED: CUT RATES TO BOOST LOCAL DEMAND www.businessmirror.com.ph
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Thursday, July 17, 2025 Vol. 20 No. 277
P25.00 nationwide | 2 sections 22 pages | 7 DAYS A WEEK
By Cai U. Ordinario @caiordinario
HE Bangko Sentral ng Pilipinas (BSP) should adopt a more accommodative stance and reduce policy rates by another 50 basis points (bps) to boost domestic demand, according to Nomura. In its Global Economic Outlook Monthly brief, Nomura said this will bring down key policy rates to “a below-neutral” rate of 4.75 percent. The last policy meeting brought down interest rates by 25 bps to 5.25 percent. Nomura noted that domestic
demand has been weak as evidenced by the “disappointing” 5.4-percent GDP growth in the first quarter, despite election-related spending. “[The first quarter performance] suggests businesses have already See “BSP,” A2
Account Ownership (2024)
Financial Resilience
Savings Behavior (2024)
❝The findings suggest that policies to increase account ownership should focus not only on reducing barriers, but also on improving the customer experience and product design to support continued account use and customer retention.❞ — World Bank Group, on account ownership
Mobile Connectivity & Security
❝Financial inclusion has the potential to improve lives and transform entire economies.❞ — World Bank Group President Ajay Banga
BM Graphics: Ed Davad | Source: World Bank Group, Global Findex 2025
NO SAVINGS GRACE: 4 MILLION FILIPINOS STILL UNBANKED
Over 4 million Filipinos remain unbanked—see the full story on Banking, B3.
EXTERNAL RISKS MAKE GROWTH GOAL OF 6% A CHALLENGE: DOF
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CHIEVING the country’s growth potential of at least 6 percent remains a challenge, as external uncertainties continue to weigh down economic performance, according to the Department of Finance (DOF). At the Chamber of Thrift Banks’ national convention on Tuesday, DOF Chief Economist Domini SD. Velasquez said the Philippine economy is currently growing at an average of around 5.5 percent. “We do think that the potential of the Philippines is at a minimum 6-percent growth. But of course, it’s quite difficult, especially with
some of the challenges that we’re seeing,” Velasquez said. The Cabinet-level Development Budget Coordination Committee (DBCC) had to reduce the country’s growth target to 5.5 to 6.5 percent, from 6 to 8 percent, this year due to heightened global uncertainties. The country’s gross domestic product (GDP) grew by 5.4 percent in the first quarter, lower than the government’s target of 6 to 8 percent at that time. Even Finance Secretary Ralph G. Recto pointed to uncertainties, specifically with trade policies, See “External,” A2
SKY-HIGH HOPES, $26 SHORT Metro Manila’s skyline rises over Quezon City on Wednesday, July 16, 2025—a striking image of ambition amid economic limbo. Despite the Marcos
administration’s push for sustained growth and structural reform, the World Bank continues to classify the Philippines as a lower middle income country. Newly released data shows the nation’s GNI per capita at $4,470—just $26 short of breaching the upper middle income threshold. As global trade tensions mount and new tariff threats loom, experts warn that without deeper reforms and better resilience, the country’s climb toward high-income status may remain just out of reach. NONOY LACZA
DOF shrugs off 1% remittance tax impact By Reine Juvierre S. Alberto
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@reine_alberto
HE Department of Finance (DOF) has shrugged off concerns over the 1-percent excise tax on remittances from the United States, saying its impact on the Philippine economy next year will be minimal. Speaking to reporters on the sidelines of the Chamber of Thrift Banks’ national convention on Tuesday, DOF Chief Economist Domini SD. Velasquez said the remittance tax will affect 0.009 percent of the country’s gross domestic product in 2026. “At the end of the day, the 1 percent [tax rate] is small. They
might be sending the same also to compensate for that,” Velasquez said. Based on DOF’s estimates, $1.9 billion of remittances flowing out of the United States to the Philippines will be impacted by the tax measure. This only takes up 5.2 percent of the BSP’s overseas remittance projection of $36.5 billion for 2026. Velasquez said 12.8 percent of those surveyed by the DOF said they are receiving remittances from North and South America. The figure is smaller than the 40 percent of remittances coming from the United States, based on the data from the Bangko Sen-
tral ng Pilipinas (BSP). The BSP tracks remittances wired through banks, wherein some remittances from other countries routed to US banks show up in the BSP data. The imposition of tax on remittances, however, could drive Filipinos abroad to tap informal money senders or go to the “black market” just to send money to their families in the Philippines. (See: https://businessmirror. com.ph/2025/05/19/expertssee-backlash-f rom-us-remittance-tax/). BSP data showed cash remittances grew 2.9 percent to $2.66 billion in May 2025 from $2.58 billion recorded in May 2024. (See: https://businessmirror.
com.ph/2025/07/16/5-monthremittances-up-but-slowdownfeared/). This brought total remittances in the first five months of the year to $13.766 billion in 2025, a 3 percent growth from 13.365 billion in 2024. The United States remained the top source of remittances to the Philippines, accounting for 40.2 percent of the inflows during the January-May 2025 period. The remittance tax, part of the Trump administration’s legislative package called the “One Big Beautiful Bill,” will take effect after December 31, 2025. This will be applied to all remittance senders, including US citizens.
PESO EXCHANGE RATES n US 56.7480 n JAPAN 0.3813 n UK 75.9685 n HK 7.2294 n CHINA 7.9025 n SINGAPORE 44.1550 n AUSTRALIA 36.9486 n EU 65.8447 n KOREA 0.0409 n SAUDI ARABIA 15.1312 Source: BSP (July 16, 2025)