Peso, stocks brace for volatility as rate bets fade

August 10, 2026

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Philippine markets may stay on edge as investors juggle Middle East risks, oil prices and the next move by the Bangko Sentral ng Pilipinas, but fading rate-hike bets are giving both the peso and stocks some breathing room.
Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said the peso could remain volatile against the US dollar, with the BSP’s Aug. 27 policy meeting looming and geopolitical developments capable of quickly shifting market sentiment.
The peso closed at P60.90 per dollar on Aug. 7, slightly weaker on the day but still near a six-week high. It gained 0.6 percent for the week, extending its winning streak to two weeks.
Possible BSP intervention, stronger foreign investment inflows and expectations of policy support could underpin the currency, Ricafort said. The bigger threat is oil. A sustained spike driven by Middle East tensions could revive inflation pressures and make the BSP’s policy path more difficult.
“The key catalysts would be developments or lack thereof on the negotiations for a more permanent US-Iran peace deal,” Ricafort said.
Stocks, meanwhile, appear to have regained some footing. The Philippine Stock Exchange index climbed 0.2 percent to 6,290.35 on Aug. 7, ending a three-day slide and posting a 0.9-percent weekly gain.
Ricafort said bargain-hunting, corporate earnings and easing inflation pressures could keep the index biased upward. Softer-than-expected second-quarter economic growth and July inflation may also lessen the urgency for another rate hike, offering equities a potentially friendlier monetary backdrop.
But the market’s next leg higher is not guaranteed. The PSEi faces initial resistance at 6,300, with 6,340 to 6,375 the next major hurdle.
For now, markets have some room to breathe. Whether that turns into a sustained rally may depend less on local fundamentals than on whether geopolitical risks finally begin to cool.