Double whammy: Beyond country’s control

On April 29, 2026, peso closed at P61.567 to a US dollar. This is an all-time low and marks the weakest point in the peso’s history. Accurately though, Economic Planning Secretary Arsenio Balisacan explained this as “largely driven by external factors, particularly the strength of the US currency and rising global oil prices.”

As usual, as there is a severe political divide among us, critics in both sides of the political fence are parroting their so-called expert prognosis of this country’s future. Amusingly, almost everyone has become instant economic pundits brandishing their in-depth analysis on the nation’s current and long-term financial health.

Indeed, we can’t help but agree on that aphorism that Filipinos have very short memory.  To recall, about a decade ago, whether in the same informal talks or discussions or economic briefings, we didn’t hear anything but complaints about the strength of the peso. As if, nobody is happy, not anyone gained. In fact, when it was at its strongest on February 28, 2008 at P40.40460 to a dollar, calls for civil disobedience were even floated.

Likewise, about four years ago (in June, 2022), when the exchange rate was a seemingly uncontrollable P54 to a dollar and oil prices went beyond over US$110 per barrel, both educated and unschooled critics became instant prophets of doom. Doomsayers, as they had always been, were trumpeting here and there that the country was holed into a bottomless pit, a hopeless situation.

Yes, inflation rate then was high. Gasoline prices seemed unreachable. Fares then went up. Basic commodities appeared as valuable as gold for the underprivileged Filipinos. Poverty-stricken, most of our brother Filipinos settled for crumbs just to fulfill their modest desires to half-fill their empty stomachs.

The truth though is, whatever direction the peso goes, certain demographics will always benefit. Exporters of goods, services (BPOs) and OFWs rejoice when it is weak and importers cheer when it is strong. Sadly, the rest will just have to navigate or simply bear the consequences of it.

Generally, strength is always viewed as power, a strong point. Weakness, on the other hand, is taken as powerlessness, a flaw. While this could be true in most situations, in currencies, perceptions are different. Some rejoice in its weakness while others embrace its strength. Undeniably, recipients (exporters) and users (importers) of foreign currencies have different preferences. There is just no universal remedy that can please both. Either way, there will always be advocates and critics. Frankly, Erap aptly said it, “weather-weather lang”.

However, with oil prices rising and the US dollar strengthening at the same time, the situation will be entirely different. As we also import some of our very basic needs like rice, the impact could be even severe.

Yes, it is no secret that our country imports at least 90% of our domestic oil consumption.  That’s huge in any language. Since global oil trade is denominated in US dollars, our peso’s performance against it is a huge influence too. Consequently, not only that we bear the brunt of the rampaging global oil price rise, we have to also spend more pesos in every dollar of oil imports.

Collectively, with these two scenarios (increases in global prices of oil and US dollar’s strength) prevailing, local fuel prices will be more sickening. Worse, in huge metropolis like Metro Manila and Metro Cebu, where traffic jams double one’s fuel consumption, oil-related miseries will become so unbearable. That is if it isn’t yet.

Moving forward, indicators are not on our side. Today, as the protracted war in Ukraine rages on and higher than usual volatile situation in the Middle East obtains, oil price indicators aren’t rosy at all. Experts, in fact, predicted that oil prices could spike toward US$150-US$200 per barrel if the Strait of Hormuz remains closed. That it shall potentially ease in the fourth quarter to around US$90 per barrel only if disruptions subside.

What makes the situation concerning for us though is the fact that, reportedly, we are expected to import “4.8 MMT, or even reach 5.5 MMT” of rice this year. Factor in our debt-servicing, the current situation can go from bad to worse.

Agreeably, this is a double whammy (US dollar’s strength and the raging oil price) but, certainly, not a hopeless one.