A cultural preference for spending over saving is among the forces dragging down the peso, according to Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., who told lawmakers the fix lies partly in how Filipinos handle their money.
His diagnosis was blunt. “Medyo mahirap sabihin ‘to… pero mayabang tayo eh. May consumption culture ang tawag,” Remolona said, framing the country’s appetite for consumption as a problem that rarely gets named in currency discussions.
The governor laid out the mechanics through the current account—the running tally of money entering and leaving the country. “Kasi pag binilang mo yung remittances at tsaka yung BPO, ang diperensya ng pumapasok na pera tsaka lumalabas, ang tawag dun, current account,” he explained. By his account, the Philippines has run a deficit on that measure for years, with foreign currency leaving faster than it comes in.
That framing came in response to Sen. Erwin Tulfo, who pressed the governor on the peso’s slide during the Senate finance committee hearing on Thursday, August 27, and questioned whether dollar earners like overseas worker remittances and the outsourcing sector were enough to hold the line. Remolona’s answer was that they are not, because national spending abroad outpaces what those sectors bring home.
Tulfo reached for a household analogy: a family pulling in P50,000 a month but burning through P80,000. “We spend more than what we make,” the senator said. The governor took the comparison up to national scale, noting that a country whose investment outstrips its savings has to look overseas to cover the shortfall. “For the country, as a whole, para ma-finance yun, mas malaking investment kaysa savings eh,” Remolona said. “Kaya para ma-finance yun, uutang tayo sa abroad.”
Remolona did not dispute that outside forces—inflation, broader economic conditions, and global tensions—are squeezing the currency. He said the central bank can lean against a falling peso but cannot hold any fixed line, such as P60 to the dollar, forever without draining its foreign exchange reserves. Soft exports and a trade deficit, he added, are compounding the strain.
On the policy side, the BSP has been tightening. The Monetary Board lifted its benchmark rate by 25 basis points on August 27, a third straight increase that the source puts at 75 basis points of cumulative tightening since April—figures worth confirming against the official decision. July inflation, at 6.2 percent, sat above the bank’s 2-to-4-percent goal.
For all that, the governor kept returning to a slower, structural remedy: a nation that both earns more and, crucially, sets more aside. “Hangga’t maaari, sana tumaas yung savings natin,” he said. “Yun ang long-term na solution.”
