MANILA: As Christmas lights shine brighter and overseas Filipino workers send remittances for the season, the value of every peso becomes more apparent — even in something as simple as the price of a burger.
Dr Alicor Panao, INQUIRER Metrics data scientist and associate professor at the University of the Philippines, said in an analysis based on the 2025 Big Mac Index that the peso is about 50 per cent undervalued against the US dollar.
The index, created by The Economist, is a lighthearted way of illustrating Purchasing Power Parity (PPP), which is the idea that exchange rates should eventually adjust so that the same goods cost roughly the same across countries.
But instead of a complex basket of items, the 2025 Big Mac Index uses one familiar product—the Big Mac—to compare purchasing power across currencies, like the peso and USD.
This year, it costs about US$2.89 in the Philippines, placing the country among the world’s lower-cost economies. Prices are slightly higher than those in India and Indonesia but remain cheaper compared with Malaysia, Thailand, and Japan.
By comparison, the same burger costs $5.79 in the United States and almost $8 in Switzerland.
However, the peso’s undervaluation has immediate and tangible implications, especially for OFWs, Panao said, explaining that each dollar, euro, or riyal sent home converts into more pesos.
He said that this allows remittances to stretch further for food, school expenses, and holiday spending throughout the Christmas season.
The same exchange rate dynamic also benefits local exporters, whose goods become cheaper and more competitive in global markets. In theory, PPP suggests that such undervaluation should gradually correct itself over time as the peso strengthens.
But in practice, the Big Mac Index offers a snapshot rather than a forecast — highlighting how prices differ across countries and why exchange rates matter most throughout a season when remittances and household spending peak. - Philippine Daily Inquirer/ANN
