Seemingly strong peso?

"Historically the United States dollar strengthens when US Treasury yields rise. But the reverse happened in April after the White House announced widespread tariffs," a Charles Schwab advisory said.

- BOO CHANCO

As of June 4, 2025, the US dollar (USD) has experienced a notable decline against major currencies: about 5.7 percent against the Euro; about 8.6 percent against the Swedish Krona; about 6.2 percent against the Japanese Yen and about 2.6 percent against the Swiss franc. The Canadian dollar was the only major currency against which the USD showed a slight gain of about 0.1 percent.

On Dec. 19, 2024, the USD reached its highest exchange rate with our peso in recent months at P59.128 per USD. As of June 4, 2025, the exchange rate is at P55.78.

The weakening dollar is somehow causing the value of the peso to rise against it. Never mind that our strong import dependence and weak exports should be reasons enough for the peso to be weaker.

One economist claims our marvelous $106.2 billion forex reserves have been built up by debt proceeds, not from export revenues.

Ralph Recto's increasing foreign borrowings have introduced more US dollars into the economy, a factor in the strong peso.

Why do our officials have a bias for a strong peso?

A weak peso is bad politics because it erroneously gives the impression of an administration's economic failure. Besides, the strong peso is favored by the economic elite. Their Hermes Birkin bags and their Paris vacations will be cheaper.

But what about the non-elite?

Well, it depends. For OFWs, a strong peso means their usual padala will translate to less pesos. That in turn, impacts on the total economy's vibrancy and may threaten political stability.

Migration expert Manny Geslani told Freeman, a Cebu daily, that "an OFW family loses P1,760 for every $500 sent by their loved one from abroad, thus affecting their monthly budget."