EXPLAINER: What the Rising US Dollar Exchange Rate Means for Filipinos

(SPOT.ph) You've probably seen the headlines about the Philippine peso hitting record lows against the US dollar. But unless you're planning a trip abroad or buying something in dollars, you might be wondering: What's that got to do with you? Well, more than you might think.

On October 27, the peso closed at P64.17 against the US dollar, marking another record low for the currency. For comparison, the peso was at P58.79 on the first trading day of 2026.

The P64.17 close marked the seventh record low in nine trading days, making it the peso's 33rd record low of 2026. The previous lowest USD-PHP exchange rate in history was P56.45 to $1, a record that held for 18 years from 2004 until it was broken in 2022. Experts point to global tensions, dwindling investor confidence, and the flood control scandal as some of the factors behind the peso’s poor performance this year.

All this jargon might sound like something only economists need to worry about, but even if you aren’t spending in US dollars, a weaker peso can still affect how much you pay for everyday necessities. Read on to learn more about why the exchange rate matters to everyone.

Long story short: A higher exchange rate can mean a higher cost of living. Power, groceries, daily necessities—you name it —some of these could get more expensive with a weaker peso.

Fuel is one example of how a weaker peso can add to everyday expenses. Because the Philippines is highly reliant on imports of fuel and oil, we’ve all been feeling the pinch at the gas pump due to the ongoing US-Israel war against Iran. With global oil prices already rising, a weaker peso only adds to the pressure on local fuel prices.

The impact could also extend to electricity bills. The Department of Energy (DOE) has flagged that currency depreciation will bleed into electricity costs. Some power plants rely on imported fuel, so a weaker peso can also increase electricity generation costs that may eventually be passed on to consumers. Just our luck as we head into Super El Niño.

“It will impact the per kilowatt rate of electricity since pass-through siya, it will impact the per kilowatt. We'll check if there's any way we can delay or maybe lessen the impact but that is something I will have to discuss with ERC,” DOE Secretary Sharon Garin said.

Garin also shared that the peso depreciation will affect coal, diesel, and liquefied natural gas because they are quoted and purchased in dollars. So yes, that could mean more expensive trips to the gas station and, eventually, higher fares for everyday commuters.

Food prices could also be affected. We’re also importing agricultural products like wheat, meat, and animal fats—even rice amid drought shocks.

When these imports become more expensive, the added costs could eventually reach grocery shelves. For example, more expensive imported wheat could affect the prices of bread, pasta, and other food products. So keep an eye on your favorite food brands.

However, the Department of Trade and Industry (DTI) has announced that retailers have agreed to freeze prices on certain basic goods, such as canned sardines, coffee, and bottled water until the end of 2026.

Raw materials for manufacturing are also among the Philippines' major imports. Essentially, when companies have to import the materials for their products, they have to figure out how to offset the higher costs brought about by a weaker peso. This means they may either absorb the additional costs or pass some on to consumers through higher prices.

This could affect the prices of household appliances, personal care products, and other everyday items that rely on imported materials.

At first glance, a weaker peso might seem like good news for OFWs and their families. After all, the same amount of US dollars now converts to more pesos, but there's a catch.

In an interview with Bilyonaryo News Channel, Emmanuel Leyco, president and chief economist of Credit Rating and Investor Services Philippines, warned that international remittances coming from overseas Filipino workers may not be enough to cushion the blow to the economy. While a higher exchange rate looks better on paper for OFW remittances, families here at home can expect inflation to eat away at the value of these transfers.

It doesn't help that OFWs are also facing economic difficulties abroad, which could limit how much they can send home.

“Our OFWs are also located where economic problems are happening. In the US, the biggest source for remittances for Filipino families, [they] are also experiencing high inflation and uncertainties with their economies. Filipinos in the Middle East are getting hurt directly,” Leyco said.

Still, a higher USD-PHP exchange rate could benefit Filipinos who earn in US dollars, such as freelancers and remote workers. Exporters in the electronics and minerals industries, as well as businesses in local tourism, could also benefit.

“Our exports get cheaper habang lumalakas ang US dollar, it becomes more attractive to overseas buyers... Meron din potential positive outcome for tourism. If mababa ang peso to foreign tourists, it looks cheap to come to the Philippines and it becomes attractive yung Pilipinas as a destination [because] your dollar goes further,” TV5 Business News Editor Regina Lay shared in a report.

Leyco said the next two months are “critical” for the Philippine economy.

He pointed out that more Filipinos could struggle to keep up with loan and credit card payments under these conditions. Household consumption will also slow down as more people hold back on unnecessary spending.

“The government should focus on protecting, defending the purchasing power of our consumers. After all they represent more than 60% of our GDP so if the purchasing power of our consumers weakens, that share of our GDP will also decline... We can expect further deterioration of our economy in the next few months,” Leyco said.

For our part, we can really only manage this period with more budget tightening—a tough pill to swallow as we head into the Christmas season. Closely monitor household spending, especially on utilities like gas, electricity, and groceries.

If you earn in US dollars, you might also consider allotting part of your savings into US dollar accounts, especially if you have future expenses in dollars.

Also read: GCash's New Feature Lets You Receive USD And Convert to PHP When You Need It—Here's How