Manuel Mogato | October 29, 2026
Some Southeast Asian countries have reduced their dependence on the American dollar in global trade transactions and are exploring alternative currencies.
As trade with China and Japan grew, Cambodia, Indonesia, Malaysia, Singapore, and Thailand have started looking for alternatives to stabilize their own local currencies.
Only the Philippines remained too dependent on the greenback, as imports were paid mostly in US dollars, particularly petroleum products and raw materials for manufacturing. (Also read: End oil sanctions to stabilize global supply and prices)
This week, the peso plunged to its lowest level of 64 pesos to a dollar as the American currency strengthened, showing how vulnerable the Philippine currency is.
The Philippines may risk losing its international reserves in defending the peso. This was also due to the high proportion of US dollars and Euros in existing investment portfolios.
Can the Philippines shift to another currency or return to gold reserves to stabilize the peso? The answer is no.
The Philippines is too dependent on the US dollar. Gold production is not enough, and its gross international reserves are too low.
In fact, it sold 25 tons of gold, or roughly 16 percent of its reserves, in 2024 to fund the fiscal deficit caused by massive corruption among lawmakers and politicians.
President Ferdinand Marcos must start increasing gold reserves to mitigate potential losses and restore the reserves.
If the administration doesn’t take concrete steps in building up gold and foreign currency reserves, the country’s economy will suffer more.
Already, the Philippines’ inflation rate is galloping, its growth rate is in the abyss, and the Philippines is nearing stagflation, making it the “sick man” of Southeast Asia, or perhaps in Asia.
Its Southeast Asian neighbors are doing better than the Philippines, but they also worry about the US dollar’s volatility.
Decades ago, the Association of Southeast Asian Nations (ASEAN) had entertained creating a regional currency to reduce dependence on the US dollar.
But after what happened to the Euro, ASEAN abandoned the idea and pursued flexible individual currency policies.
Still, many ASEAN countries were worried about the volatility of the American dollar and Washington’s use of its currency as an embargo mechanism.
This has led many countries, including ASEAN, to lose confidence in the dollar’s stability and safety as a global safe haven.
Moreover, US President Donald Trump’s tariff war has destabilized the economies of friends and foes, which has affected Washington’s overall standing.
Thus, many countries were forced to de-dollarize to evade sanctions, particularly China, Iran, and Russia.
For instance, in 2025, after Trump assumed office a second time, many countries began moving away from the US dollar, looking for alternative transaction instruments.
Trump also pursued an isolationist foreign policy and an erratic economic policy, accelerating the de-dollarization as Europe and China expanded their own international financial systems.
Bigger, stronger economies could afford to move away from the US dollar, in terms of foreign currency reserves and global trade transactions.
Russia, for instance, had forced the Europeans to pay in its local currency for energy imports after Washington imposed sanctions.
But the United States is now allowing its allies and partners to pay in dollars for Russian diesel and other petroleum products due to tight global supply brought by the conflict in Eastern Europe and the Middle East.
BRICS countries — Brazil, Russia, India, China, and South Africa — have been using other currencies, such as the Chinese yuan, in payment and settlement systems, as they are major suppliers of electronics, cars, and other industrial equipment.
China is emerging as the major trading partner of more than 100 countries, and they avoid using the US dollar in transactions.
Diversifying financial infrastructure is not an anti-American strategy, as Washington wants most countries to believe.
But it only represented the right of independent sovereign states to develop their national financial systems.