Suppose the Philippine peso $($currency code PHP$)$ to USD exchange rate is $40PHP=1$ USD.

Inflation is expected to be $1\mathrm{.}1\%$ in the U$.$S$.$ and $3\mathrm{.}2\%$ in the Philippines. According to

purchasing power parity.

The USD is expected to depreciate approximately $4\mathrm{.}3\%$ against the PHP over the next year,

None of the other answers are correct.

The USD is expected to depreciate approximately $2\mathrm{.}1\%$ against the PHP over the next year,

The USD is expected to appreciate approximately $4\mathrm{.}3\%$ against the PHP over the next year.

The USD is expected to appreciate approximately $2\mathrm{.}1\%$ against the PHP over the next year.