President Marcos: Defending peso against strong dollar using reserves is futile

President Ferdinand Marcos Jr. said it would be impractical to use the country’s foreign reserves to prop up the Philippine peso, which recently fell to a record low of P60.30 against the US dollar.

In an interview with Bloomberg, Marcos explained that the dollar’s strength is tied to the United States being the world’s largest oil producer.

He emphasized that intervening heavily in the currency market would not be a sustainable approach.

"As a matter of policy, we defend the peso to a certain extent, but with the dollar moving the way it is— and it's moving; whereas before the dollar was seen as a safe harbor currency. When you look deeper into it, the dollar's movement increase in value has been really because they're the largest oil producer, and that's why that is," Marcos said.

"And considering that, then we have to— I think it would be even futile to try to spend all of this, all of our foreign reserves on defending the peso," he stressed.

The President also noted that the ongoing conflict in the Middle East is disproportionately affecting middle- and lower-middle-income countries such as the Philippines.

He added that while remittances are dollar-denominated, they are not enough to offset the peso’s depreciation. Despite external pressures, Marcos said the government remains optimistic about achieving its economic growth targets.

"We believe we can. I mean, we were forecasting for the year 2026, we were going to manage between 6 and 7 percent. And that figure was something that we came up with internally, but the other financing institutions and the banks also seem to have had the same opinion," he said.

However, he acknowledged that the conflict in the Middle East has introduced new uncertainties that could affect projections.

"Then, of course, oil. Oil does what it does, but it was fairly steady at $72 per barrel for a good while. So that's those are the bases that we were calculating. Right now, things change every day. So we have to model that and recalculate that. So we will have to see how long this problem lasts, how long it will take to adjust," he said.

Marcos pointed to investments as a key driver in sustaining economic growth. "Of course, it's investment. Because when it comes to production, perhaps our largest, our largest export in dollar terms is semiconductors. And that has been a very important part," he said.

"And we have now moved away— not away, but up the value chain from just pure fabrication to design. And that has put us in a very good position for the advent of data centers, of AI. And investment, of course, is most important as well," he added.