Stronger peso seen to last until next year

The Philippine peso is seen likely maintaining its relative strength against the United States (US) dollar for the rest of this year until early next year, as the greenback struggles amid US economic policy uncertainty, according to Japanese financial giant MUFG Bank Ltd.

- BY BEN ARNOLD DE VERA

"We maintain our view for the Philippine peso to outperform Asian foreign exchange (FX)," MUFG Research said in its latest monthly foreign exchange outlook for May 2025, published last week.

MUFG noted that as of end-April, the peso had strengthened to a spot close of P55.841:$1 on April 30, from P57.24 at the start of last month.

As such, the bank lowered its USD/PHP forecast to P55:$1 (trading within a range of P53 to P58) by year-end and P54.5 (a range of P52.5 to P57.5) by the first quarter of 2026.

It expects the peso to end the second quarter at the P56.3:$1 level (a range of P54.3 to P59.3), before appreciating to P55.6 (a range of P53.6 to P58.6) by the end of the third quarter.

Previously, MUFG's projection was a peso weakening to P58.8:$1 in the second quarter, before gradually appreciating to P58.5 in the third quarter, P58.2 in the fourth quarter, and P58 in the first quarter of next year.