Due to the weakening Philippine peso, Filipinos working overseas are able to send more money home. Meanwhile back in the Philippines, higher inflation is beginning to bite.
According to BMI research, a firm based in the United Kingdom, the Philippine peso is expected to continue depreciating to PHP54 to the US$ by the end of this year, Rappler reported.
“The Philippine peso continues to be the worst performing currency in the region, having weakened by more than 7% against the US dollar since (the beginning of the year),” BMI research said.
The firm said that prospects for the peso “look bearish” as the inflation rate in the country rose to 4.6% in May due to higher oil prices in the global market and the implementation of higher taxes.
However, the remittances of overseas Filipino workers continue to support the peso as remittances account for over 10% of the country’s gross domestic product. The fall in value of the peso benefits more than 10 million Filipinos working overseas as their salaries paid in foreign currencies enable them to send more pesos back home.
BMI Research expects that in 2019, the Philippine peso will hover at PHP54 to the US dollar.