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WIKI ANALYSIS
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This article describes a currency traded on the global foreign exchange market. View articles referencing this currency. |
The chart at left shows the USD/PHP currency pair; the number of Philippine Peso equivalent to 1 U.S. Dollar (USD).
The Philippines Peso can be considered a highly volatile currency. Since the beginning of the global crisis in 2008, it has lost 40% of its value, compared to its highest level. In 2009 it has regained some value in the context of improving economic conditions.
The PHP is under the pressure of recurring commercial deficit that the Philippines have recorded for years. Remittances from Overseas Filipino Workers (OFWs) allow the current balance to remain positive and provide the central bank (Bangko Sentral ng Pilipinas, BSP) with high levels of foreign reserves. Indeed, while FDI and capital inflows can very volatile, remittances have proven their regularity and steadily increase year after year. In 2009, the BSP had over $35 billions in foreign reserves, which covers 8 months of imports.
The BSP has stated that variations of the PHP weren't a major concern and given the level of its reserves, it has plenty room to protect its currency if the need arises.
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