PHILIPPINE PESO has entered a new versionthread low against the dollar on Monday while the major stock benchmark recorded its best climba one-day decline from 2020 like the rest of the world oil prices have increased, threatening to rise inflation as the war in the Middle East continues.
The local unit fell 50 cents to close at P59.50, the lowest against the greenback since its close of P59 on Friday, data from the Bankers Association of the Philippines showed. This surpassed the record low close of P59.46 posted on Jan. 15.
Year to date, the peso is now down 1.19% or 71 centavos from the end of 2025 to close at P58.79.
The peso opened Monday’s trading session very weak at P59.25 to the dollar, which was already the highest value of the day. Its weakest showing was at P59.71, which is now the lowest daily level the local unit has touched.
Trade dollars rose to $2.597 billion from $1.847 billion on Friday.
The peso’s intraday drop may have been a knee-jerk reaction to oil prices hitting $100 per barrel at the start of the trading day, the first trader said in a Viber message.
The peso’s decline on Monday was driven by global risk sentiment and strong demand for dollars amid the Middle East conflict, Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
“The tension in the world, especially the conflict in the Middle East, has made investors reach for safe havens like the US dollar, putting pressure on emerging market currencies including the peso. At the same time, high oil prices around the world are raising concerns about the Philippines’ revenue bill as the country is a net energy consumer, increasing the demand for dollars in the local market,” he said.
“Also, the expectation that US interest rates may remain high for a long time tends to strengthen the US dollar against regional currencies. If these external factors are accompanied by a thin market deficit or a perceived stand, the Philippine peso may have sharp daily movements.”
The U.S. dollar fell on Monday as rising oil prices sent investors scrambling for cash on concerns that a protracted war in the Middle East could severely disrupt energy supplies and hurt global growth, Reuters reported.
It measured some gains in the Asian afternoon in Financial Times reports that the Group of Seven Finance Ministers will discuss on Monday the collective release of oil from emergency reserves coordinated by the International Energy Agency. The report sent oil prices slightly lower after earlier rising as high as $120 per barrel.
Analysts say Asia could bear the brunt of the energy price shock, given the region’s heavy reliance on oil and gas from the Middle East.
Chief Economist Rizal Commercial Banking Corp. Michael L. Ricafort added in a Viber message that the peso was also dragged down by possible monetary tightening signals from the Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr.
Mr. Remolona said inflation in the Philippines could break 4% if oil prices rise above $100 per barrel, which would force them to raise prices again.
On Tuesday, the first trader expects the peso to move between P59.40 and P59.65 per dollar, while Mr.
In the near future, Mr. Rivera said the peso may remain under pressure due to persistent external pressure and range from P59 to P60 per dollar ahead of the BSP’s next policy meeting on April 23. He added that the country’s hot international currencies are difficult.fis willing to manage short-term pressures without seriously weakening the country’s external position.
“At the current levels, we expect the peso to test the key level of P60 but since the recent movement of the peso has been driven by a sudden event, the intervention of the BSP is inevitable as this sudden movement of FX (foreign exchange) can jeopardize domestic inflation expectations,” the first trader added.
A second trader said the peso will likely track other Asian currencies in the near-term, but will likely continue to be one of the worst performers in the region as tensions could affect remittances.
STOCKS
The heightened emotion due to the long-standing conflict is also affected stock market, and The Philippine Stock Exchange index (PSEi) fell 4.97% or 314.19 points to close at 6,006.22, while the broader index of all shares fell 4.24% or 148.24 points to end at 3,346.75.
This was the bellwether’s biggest one-day decline since April 16, 2020, when it fell 7.07% or 420.45 points to 5,525.60. This was also its lowest close in nearly three months or since it closed at 5,920.87 on Dec. 19, 2025.
The PSEi opened Monday’s session at 6,198.45, down 1.93% from Friday’s close of 6,320.41 and already at an intraday high. It crashed to an intraday low of 5,938.39, down 6.04% from Friday’s level, but managed to rally back above the 6,000 mark before the closing bell.
“Financial markets are now in a perfect position to reduce risk in the face of $100 oil and the prospect of a long war in the Middle East,” said the Managing Director of China Bank Capital Corp. Juan Paolo E. Colet in a Viber message.
Unicapital Securities Research Head Wendy B. Estacio-Cruz said the rise in crude oil prices presents short-term inflationary threats to the Philippines, an oil importer, which will disrupt the BSP’s easing cycle and undermine investor sentiment.
“In stocks, high oil is effectively acting as a consumption tax and business restrictions, weighing on consumers, goods, and transport-related sectors that dominate the PSEi, while the rejection of global risks may result in the exit of some countries in emerging markets, putting more pressure on the balance and the peso,” he said in a Viber message.
“In this scenario, defensive sectors such as utilities, power producers, and telecommunications may be more resilient given their stable movements and ways to outperform prices, while companies with dollar gains or foreign exposures may benefit from possible peso weakness.”
F. Yap Securities Investment Analyst Marky Carunungan also said that the increase in oil prices may increase the expected inflation rate and result in tight financial conditions.
“If the conflict leads to a further increase in oil prices, the biggest risk would be higher inflation and a delayed easing cycle from the BSP. That could keep interest rates higher for longer, which has historically weighed on equity valuations.”
“The near-term impact is focused on the increase in inflation and growth concerns. As oil prices rise, the fear increases that the cost of goods and services may accelerate, as transport and transportation are more dependent on fuel. At the same time, the growth of GDP (gross domestic product) is already at low levels, the risk of price increases may begin to rise,” analyst Jarrod Leighton M. Tin added. – Aaron Michael C. Sy again Alexandria Grace C. Magno
