The GBP/PHP currency pair represents the exchange rate between the British pound sterling and the Philippine peso.
The pair is less commonly traded, but it may provide traders with very unique opportunities if there is a setup they wish to exploit. However, brokers offering the pair on their platforms may be hard to come by.
Overall, the GBP/PHP is influenced by factors including economic conditions in the UK and the Philippines, monetary policy decisions, and remittance flows, which play a role in the Philippine economy. Remittances in the Philippines help support economic growth as they increase the recipient’s household income and the foreign exchange reserves of the recipient’s country.
The Philippines’s major exports are electronic products, other manufactured goods, and woodcrafts and furniture.
GBP/PHP Performance
While the GBP/PHP strengthened for most of the first half of the year, the Philippine peso has gained strength in the latter part, despite rate cut speculation pushing the PHP lower against the USD in recent weeks.
Even so, through 2024 the GBP/PHP gained 3.4%.
| Timeframe | Performance |
|---|---|
| 3 Months | -2.71% |
| 6 Months | -2.30% |
| Year-to-Date | +3.40% |
| 1 Year | +3.27% |
Other Currency Pairs
GBP/PHP Forecast
Forex.com senior market analyst Fiona Cincotta told investors in a recent article that she expects the UK economy to continue to grow in 2025. However, Cincotta added that there are potential economic headwinds, stating: “GDP could be weaker than the 1.5% forecast by the BoE owing to several key factors, including uncertainty surrounding trade and a less expansionary UK budget.”
Elsewhere, Nomura analysts said in their recent outlook for the British pound that they expect it “to continue to gain ground gradually against other currencies where their respective central banks are more concerned about the downside risks to growth rather than sticky price pressures.”
For the peso, a recent article from Bloomberg called for a potential strengthening in the peso towards the end of 2024 due to a boost from a seasonal pick up in overseas remittances ahead of the Christmas holidays. The publication noted that “inflows typically reach their highest level for the year in December.” Bloomberg adds that, according to its data, this has helped the peso gain during the final quarter in six of the last seven years. Michael Ricafort, chief economist at Rizal Commercial Banking Corp. in Manila told the publication that the “peso has a natural strong support every end of the year due to the flood of remittances that come in.”
Remittances are said to have totaled $33.5 billion last year. They are one of the nation’s largest sources of foreign exchange. As a result, the recent strength in the peso may be short-lived as we approach January.
Our View: GBP/PHP is an attractive pair for traders looking to gain exposure to emerging market dynamics while maintaining a connection to the UK economy. However, traders should remain aware of the potential for wider spreads compared to more commonly traded pairs, as well as the peso’s sensitivity to external shocks and seasonal remittance flows.
Trading the GBP/PHP
While there may not be many opportunities to trade the GBP/PHP currency pair, in certain circumstances, it could offer possibilities due to its exposure to remittance-driven flows. Traders looking to open a position in the pair should:
Monitor Seasonal Trends: As we have explained above, remittance inflows tend to peak during holidays, impacting the peso’s strength during these periods. Some traders are able to build solid strategies focusing on seasonal trends.
Spreads: Given the fact that it is less frequently traded, brokers may have a wider spread on the pair to account for the lack of liquidity.
Consider Risk Sentiment: The peso is highly sensitive to shifts in global risk appetite, making it critical to track broader market conditions.
Analyse Macro Trends: Both bullish and bearish traders should evaluate the economic outlook for the UK and the Philippines, as well as how other macro factors and economic data may affect the pair.
