THE PHILIPPINE PESO plunged to a brand new record low against the dollar on Monday while the predominant stock benchmark recorded its steepest single-day drop since 2020 as global oil prices spiked, threatening to drive up inflation because the war within the Middle East rages on.
The local unit fell by 50 centavos to shut at a brand new all-time low of P59.50 against the greenback from its P59 finish on Friday, data from the Bankers Association of the Philippines showed. This surpassed the previous record-low close of P59.46 logged on Jan. 15.
12 months to this point, the peso is now down by 1.19% or 71 centavos from its end-2025 close of P58.79.
The peso opened Monday’s trading session sharply weaker at P59.25 per dollar, which was already its peak for the day. Its weakest showing was at P59.71, which is now the bottom intraday level the local unit has touched.
Dollars traded surged to $2.597 billion from $1.847 billion on Friday.
The peso’s intraday low was likely a knee-jerk response to grease prices hitting $100 per barrel early within the trading day, the primary trader said in a Viber message.
The peso’s decline on Monday was driven by global risk-off sentiment and stronger dollar demand amid the conflict within the Middle East, Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
“Heightened geopolitical tensions, particularly the conflict within the Middle East, have pushed investors toward safe-haven assets just like the US dollar, putting pressure on emerging-market currencies including the peso. At the identical time, higher global oil prices raise concerns in regards to the Philippines’ import bill because the country is a net energy importer, increasing demand for dollars within the local market,” he said.
“Also, expectations that US rates of interest may stay higher for longer are inclined to strengthen the US dollar relative to regional currencies. When these external aspects coincide with thin market liquidity or speculative positioning, the Philippine peso can experience sharper intraday moves.”
The US dollar jumped on Monday as soaring oil prices sent investors scrambling for money on worries that a protracted Middle East war could severely disrupt energy supplies and hurt global growth, Reuters reported.
It pared some gains within the Asian afternoon on a Financial Times report that the Group of Seven finance ministers will discuss on Monday a joint release of oil from emergency reserves coordinated by the International Energy Agency. The report sent oil prices retreating barely after they earlier spiked to only shy of $120 per barrel.
Analysts have said Asia could bear the brunt of the energy price shock, attributable to the region’s heavy reliance on oil and gas from the Middle East.
Rizal Industrial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message that the peso was also dragged by signals of potential monetary tightening from Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr.
Mr. Remolona said Philippine inflation could breach 4% if oil prices surge past $100 per barrel, which could force them to hike rates again.
For Tuesday, the primary trader expects the peso to maneuver between P59.40 and P59.65 per dollar, while Mr. Ricafort sees it starting from P59.35 to P59.60.
Within the near term, Mr. Rivera said the peso may remain under pressure attributable to persisting external pressures and range from P59 to P60 per dollar before the BSP’s next policy meeting on April 23. He added that the country’s gross international reserves are sufficient to administer short-term pressures without significantly weakening the country’s external position.
“At current levels, we predict the peso to check the important thing P60 level but because the recent movement within the peso has been driven by a sudden event, BSP intervention can’t be ruled out as this sudden FX (foreign exchange) movement could endanger domestic inflation expectations,” the primary trader added.
The second trader said the peso will likely track other Asian currencies within the near term, but will likely proceed to be certainly one of the worst performers within the region because the conflict could also affect remittances.
STOCKS
Worsening sentiment attributable to the prolonged conflict also affected the equities market, with the Philippine Stock Exchange index (PSEi) plunging 4.97% or 314.19 points to shut at 6,006.22, while the broader all shares index went down by 4.24% or 148.24 points to finish at 3,346.75.
This was the bellwether’s largest single-day drop since April 16, 2020, when it went down by 7.07% or 420.45 points to five,525.60. This was also its lowest finish in almost three months or because it closed at 5,920.87 on Dec. 19, 2025.
The PSEi opened Monday’s session at 6,198.45, dropping 1.93% from Friday’s finish of 6,320.41 and already its high for the day. It crashed to an intraday low of 5,938.39, down 6.04% versus Friday’s level, but managed to climb back above the 6,000 mark before the closing bell.
“Financial markets are actually in full risk-off mode within the face of $100 oil and the prospect of a chronic war within the Middle East,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
Unicapital Securities Research Head Wendy B. Estacio-Cruz said the spike in crude oil prices presents short-term inflation threats for the Philippines, a net oil importer, which might affect the BSP’s easing cycle and further erode investor sentiment.
“For equities, higher oil effectively acts as a tax on consumption and company margins, weighing on consumer, property, and transport-related sectors that dominate the PSEi, while global risk aversion could trigger foreign outflows from emerging markets, putting additional pressure on valuations and the peso,” she said in a Viber message.
“On this environment, defensive sectors similar to utilities, power producers, and telecommunications may prove more resilient given their stable money flows and pricing pass-through mechanisms, while firms with dollar revenues or export exposure could also profit from potential peso weakness.”
F. Yap Securities Investment Analyst Marky Carunungan likewise said that rising oil prices could drive up inflation expectations and result in tighter financial conditions.
“If the conflict results in a sustained spike in oil prices, the predominant macro risks can be higher inflation and a delayed easing cycle from the BSP. That would keep rates of interest elevated for longer, which historically weighs on equity valuations.”
“The near-term impact centers on rising inflation and growth concerns. With oil prices surging, fears are mounting that the associated fee of products and services could speed up, as transportation and logistics rely heavily on fuel. At the identical time, with GDP (gross domestic product) growth already at relatively modest levels, the danger of stagflation — slowing growth combined with rising prices — could begin to emerge,” DragonFi Securities analyst Jarrod Leighton M. Tin added. — Aaron Michael C. Sy and Alexandria Grace C. Magno