What Filipinos can do as the peso weakens, according to an expert
How are your finances holding up?
The Philippine peso weakened further, hitting a record low of P64.17 against the US dollar on Oct. 26, though it slightly recovered to P63.74 by Oct. 30. At the same time, the country's inflation rate climbed to 7.2% in September—driven mostly by rising costs in food, housing, utilities, and transport.
To keep prices from soaring further, the Bangko Sentral ng Pilipinas raised its benchmark rate to 5.5%. BSP Governor Eli Remolona Jr. clarified on Thursday that while they aren't targeting a specific exchange rate, they will step in to prevent sharp currency swings that fuel inflation.
"We do intervene a little bit in the foreign exchange market, but that's mainly to avoid swings in the exchange rate that tend to be inflationary. We have estimates of how much the peso has to move before it becomes inflationary, and that's when we tend to intervene," Remolona said.
For his part, President Ferdinand "Bongbong" Marcos urged the public not to panic, as the country has “all the means” to continue defending the peso.
"First of all, do not take it with alarm. Don't panic,” Marcos Jr. told reporters on Oct. 28, adding that the development was due to the rising oil and fuel prices.
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“People can take solace in the fact that our policy towards the peso is to continue to defend the peso as hard as we possibly can. We have all the means to defend the peso," he added. "With that in mind, we will continue to do all we can to make sure that the value of the peso does not continue to go down.”
How does this affect Filipinos?
According to the BSP, exchange rate movements directly influence inflation. When the peso weakens against the US dollar, it requires more pesos to purchase foreign goods and services—such as fuel and food—driving up transportation, electricity, and production costs across the economy.
While the BSP may raise interest rates to anchor inflation expectations and foreign debt servicing costs rise, certain sectors benefit: OFW families, exporters, and BPO companies whose dollar earnings convert into more pesos. However, rising domestic inflation often erodes these gains for everyday households.
To manage these economic pressures and stabilize the economy, the BSP implements its exchange rate policy through three main measures: intervening in the foreign exchange market, adjusting monetary policy, and enforcing foreign exchange regulations.
Practical steps you can take
With the looming price increases of goods and services, finance expert Ameena Rey-Franc of The Thrifty Pinay said that one thing you can do to manage your finances is reviewing your cash flow through a "personal cash flow statement."
"How much money is coming in (Cash inflow), and how money is being spent (cash outflow)? Deduct the two and you get your net cash flow or what I call, your 'free money' after spending," she explained to PhilSTAR L!fe.
"Sometimes, we feel that our money is no longer enough, but we haven't really looked at our spending habits and determined which expenses we can adjust," she added.
She recommends reviewing essential expenses, including food, utilities, transportation, housing, and education. Other practical steps include planning meals, comparing prices, avoiding food waste, and prioritizing needs over wants.
"But that doesn't mean we should eliminate spending on luxury or mga 'luho' sa buhay. It's more of making intentional choices and spending on what truly matters to us," she added.
"I also encourage families to create a budget based on their actual income and lifestyle, instead of blindly following a budgeting formula that may not work for them. In my case, zero-based budgeting works wonders instead of the 50/30/20 rule," she added. Zero-based budgeting is a budgeting method where you assign every peso of your income to expenses, savings, or debt payments until you have zero unallocated money left.
Adjusting finances
Rising prices and a weaker peso might mean adjusting how you manage your money, but avoid making drastic moves out of panic. Rey-Franc recommends taking a step back to understand how these economic shifts actually affect your personal situation before making any changes.
When it comes to savings, she suggests keeping accessible funds for unexpected expenses, which she refers to as a “peace of mind fund” rather than an emergency fund. This provides financial breathing room not only during emergencies but also when prices rise or other unforeseen expenses occur.
"However, if your income is barely enough for your basic needs, start with an amount you can realistically afford. You don't have to force yourself to save a big amount immediately," she told L!fe.
For investments, Rey-Franc advised against making decisions out of fear or reacting impulsively to economic news. Instead, she recommended reassessing one's financial goals, investment timeline, risk tolerance, and current investments.
"A weaker peso can benefit some investments while making other expenses more expensive. Diversification is worth considering, but it doesn't mean you should automatically buy dollars or invest in foreign assets," she added.
When it comes to debt, Rey-Franc advised being careful with high-interest loans, especially credit card debt. She also said people should avoid borrowing more money to keep up with a lifestyle they can no longer afford as prices rise.
She stressed, "The important thing is to understand your own financial situation. The peso's movement is beyond our control but we can still make informed decisions about how we spend, save, invest, and manage our debts."
Focus on your own financial path
When prices rise, the pressure on your daily budget can feel overwhelming—especially if money is already tight. Rey-Franc recommends prioritizing on your most basic needs first, like food, housing, utilities, work transportation, and essential medicines. Keeping a steady source of income is your anchor.
However, if it no longer covers everything, sit down and track your spending.
"If your income is no longer enough to cover everything, sit down and list your expenses. Identify which ones are essential, which ones can be adjusted, and which payments you need to discuss with your creditors and your partner," she said.
If debt is stressing you out, contact your lender early can open up more manageable payment options. Most importantly, try to avoid taking out new loans—especially from loan sharks or online lending apps—just to pay off existing debt, as this can easily trap you in a cycle of borrowing.
Once your basic needs are covered, consider practical ways to increase your income over time, whether that means taking on freelance work, picking up a new skill, or launching a small side business. Above all, avoid comparing your financial path to anyone else’s. Everyone carries different responsibilities and starts from a different place.
"I also want people to understand that if they cannot save right now because their income is barely enough to survive, it doesn't mean they are a failure. Sometimes, the problem isn't simply poor money management but the income itself may not be sufficient to cover the rising cost of living," she stressed.
Calls for concrete action
Ultimately, policy experts and lawmakers emphasize that the burden of navigating inflation should not fall solely on everyday consumers. Akbayan Representative Chel Diokno stressed that families already stretching their budgets need specific, actionable solutions from the administration to mitigate mounting living costs.
“Filipino families are already stretching their incomes to cover basic needs. The government must lay out clear, concrete measures to address these economic pressures and ease the burden on ordinary households,” Diokno said in a statement on Oct. 30.
“Every time the peso weakens and prices rise, families can afford less with what they earn. The government must act to protect their purchasing power and ensure that basic necessities remain within reach,” he added.
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