The Philippine Peso is still undervalued by 50.4% against the dollar, according to the latest release of the Big Mac Index by The Economist. With the Big Mac costing $6.01 in the US, compared with the P169 in the Philippines by July 2025, an exchange rate of P28.12 is implied. This contrasts with the actual exchange rate of P56.73. The index is based on the theory of purchasing power parity, which suggests that exchange rates should match the value of a basket of goods and services across different economies in the long run. This approach is used to help estimate how much one currency is under- or overvalued relative to another.
