Marcos won’t spend all reserves on peso, sees 6% growth by 2028

Philippine President Ferdinand Marcos Jr. signaled that his government will tolerate weakness in the peso, saying there is a limit to their defense of the currency as market forces drive up the dollar.

“I think it would be even futile to try to spend all our foreign reserves on defending the peso,” he said in an exclusive interview with Bloomberg Television’s Haslinda Amin in Manila on Tuesday. “We also recognize that there’s only so much you can do because the dollar’s going to move the way it does.”

The peso is among Asia’s hardest-hit currencies, having weakened through the psychologically important level of P60-per-dollar for the first time in history last week. High oil prices are driving up the cost of imports for an economy that sources almost 100% of its oil from the Middle East.

Mr. Marcos said his government is having to spend money to cushion lower- and middle-income families from the impact of the US and Israeli war on Iran, which has driven oil prices to above $110 a barrel.

Asked if the Philippines could reach a pace of 8% growth by the end of his single six-year term in 2028, Mr. Marcos said that would be “tough,” and that even near-term goals need to be rethought.

“With the war in the Middle East, those have to be redrawn — everything has to be redrawn,” Mr. Marcos said of the forecasts, adding that the recent spike in energy prices came after oil had been “fairly steady at $72 per barrel.”

Even if the war stopped today, crude oil won’t immediately sink back to around $70 per barrel, Mr. Marcos said, with the crisis having created uncertainty and risk factors that will linger.

“The impact of the war is really on middle-income and lower-middle-income countries,” he said.

Investors have been pulling money from emerging markets like the Philippines, whose benchmark stock index is down more than 10% since the US attacked Iran.

Still, foreign-exchange reserves hit a record-high $112.7 billion last month, giving the Bangko Sentral ng Pilipinas a degree of firepower to support the peso, which has been under pressure along with other Asian currencies. It gained 0.58% against the US dollar on Tuesday, and the remarks by Marcos indicate authorities will support the currency without trying to determine the peso’s level.

The central bank has to do a “delicate balancing act” on intervening in the foreign exchange market to smooth any volatility, according to Michael Ricafort, chief economist at Rizal Commercial Banking Corp. in Manila.

The government is seeking to diversify energy supplies and has ordered the transport agency to delay hiking ticket prices for consumers, although a prolonged war and energy crisis could hurt businesses and consumers alike.

Growth had already been under pressure.

After Marcos announced a probe into a massive public works scandal in July, the Philippines’ once high-flying economy stuttered as protests and slowing state spending hit consumer and investor confidence. The economy expanded just 3% in the fourth quarter of 2025, well below the pace of neighbors China, Indonesia, Malaysia and Vietnam.

In January, well before the war on Iran, the Philippines cut this year’s growth target to 5% to 6% from a previous goal of 6% to 7%.

But the president is confident the economy will be expanding by around 6% or more by the end of his time in office, pointing to investment and a young and increasingly upskilled workforce. He cited the increasing value of semiconductors, many of which are packaged and exported from the Philippines.

“We’ve moved up the value chain from pure fabrication to design, which has put us in a good position for the advent of data centers and AI,” Mr. Marcos said. “We have restructured our tax incentives for investors, worked hard on the ease of doing business, brought down transportation costs and digitalization is key.”

It’s difficult to tell now if Mr. Marcos’ 6% goal is realistic, given the high level of uncertainty from the Iran war, said Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines.

“Reaching historical economic growth expansion levels really depends on the return to global oil price normalization, at least at this point in time,” he said. — Bloomberg