A comparative analysis of currency exchange movements and economic predictors between Indonesia and the Philippines

Currency exchange movements are shaped by macroeconomic variables, including inflation, remittance inflows, and foreign exchange reserves. This study analyzes economic profiles of Indonesia and the Philippines from 2006 to 2024, employing the Mann-Whitney U test and binary logistic regression to assess the factors affecting the exchange rates. The findings indicate that inflation drives Rupiah depreciation in Indonesia, whereas its impact on the Philippine Peso is minimal. Remittances significantly impact currency depreciation in both countries, with a stronger effect in the Philippines. Additionally, foreign exchange reserves have a notable influence on Peso weakening but are less relevant for the Rupiah in this study. These results underscore the need for targeted economic policies to stabilize currencies and sustain economic growth, offering valuable insights into exchange rate dynamics in emerging economies.