The purchasing power of the Philippine peso has declined sharply over the past eight years, with P1 in 2018 now equivalent to just 75 centavos today, according to the Philippine Statistics Authority (PSA).
Speaking at a Tuesday press conference, National Statistician Claire Dennis Mapa explained that purchasing power moves in the opposite direction of inflation—which accelerated to 4.1 percent in March 2026, driven largely by higher fuel prices amid tensions in the Middle East.
“The purchasing power of the Philippine peso is inversely related to inflation rate. When inflation increases, the purchasing power of the peso decreases,” he said.
Purchasing power is calculated using the consumer price index (CPI), which tracks changes in the cost of a basket of goods and services. As prices rise, each peso buys less—affecting households’ ability to afford essentials such as food, transport, and utilities. The PSA also uses the CPI in its computation of inflation, which has now reached its fastest pace since July 2024’s 4.4 percent.
The decline over the past eight years reflects the cumulative impact of rising prices, as inflation erodes the real value of money over time. In practical terms, goods and services that cost P100 in 2018 now require about P133 to purchase today—a reality now felt most acutely through elevated fuel prices, which remain firmly in the triple-digit-per-liter range in Metro Manila.
Both the PSA and the Bangko Sentral ng Pilipinas (BSP) attributed the March inflation spike to the effects of the Middle East conflict, particularly through fuel prices and transportation costs. The BSP warned that spillover effects to other items in the CPI basket could occur if the conflict is prolonged.
The peso’s sustained weakness against the US dollar has also raised the cost of imported goods. The local currency has hit record lows six times since the conflict escalated at the beginning of last month, reaching a trough of P60.74 on 31 March. While the peso remains within the P60-per-dollar range as of press time, BSP Governor Eli M. Remolona Jr. previously said that the currency’s weakness is not entirely negative.
“We understand the weakness of the peso is not necessarily a bad thing. The peso, where it's going, seems to help with our current account deficit, seems to help with our exports, so it's not necessarily a bad thing,” he said.
Meanwhile, parties involved in the conflict announced this morning a two-week ceasefire, which US President Donald Trump said would allow time to finalize a potential peace agreement between Iran and Israel.
Trump added the ceasefire will allow for the safe reopening of the Strait of Hormuz—whose closure had driven global oil prices sharply higher—which could provide some relief for Filipino consumers, particularly on fuel costs, as the government continues to roll out measures aimed at preserving purchasing power.