The Philippine peso tumbled to a fresh record low on Thursday, breaching the P60-per-dollar mark, as escalating geopolitical tensions in the Middle East and surging oil prices rattled markets and drove investors toward the safety of the US dollar.
The local currency closed at P60.10 against the greenback, down 0.58 centavos or about 1 percent from the previous session. It traded within a range of P59.90 to P60.40, with the intraday peak marking a new all-time high for the dollar, surpassing the previous record of P59.95 set earlier in the week.
Trading volume jumped to USD2.44 billion from USD1.78 billion on Wednesday, over half transacted in morning trade.
The slide came as Iran intensified its retaliation, launching attacks on key energy infrastructure across the Gulf, stoking fears of prolonged supply disruptions.
Global crude prices responded sharply, with benchmarks briefly surging above USD110 per barrel in recent sessions and earlier touching as high as USD119, keeping energy markets on edge.
For the Philippines, a net oil importer, the implications are immediate. Higher crude prices widen the import bill, pressure the trade balance, and feed directly into inflation through transport and food costs. This dynamic has historically weighed on the peso—and is again proving decisive.
Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, said the peso’s weakness reflects “demand-supply dynamics based on market forces,” compounded by increased hedging activity as firms move to shield themselves from oil-driven volatility. “Since the country imports almost all of its energy requirements, hedging is a matter of prudence,” he said.
The peso is also tracking broader dollar strength, with the greenback hovering near 10-month highs after the Federal Reserve signaled caution on rate cuts, prompting markets to push back easing expectations.
For policymakers at the Bangko Sentral ng Pilipinas, the breach of P60 is more than symbolic. It raises the risk of imported inflation and could complicate monetary policy, particularly if oil prices remain elevated.
Jonathan Ravelas of eManagement for Business and Marketing Services said the peso’s direction now hinges on how tensions evolve. For now, the currency remains hostage to geopolitics—and to the price of oil.
