Peso may extend its slide on war-driven uncertainty
THE PESO could sink further against the dollar this week as uncertainty around energy supply persists due to the Middle East war.
On Friday, the local unit dropped to a new record low of P60.55 versus the greenback, plunging by 32 centavos from its P60.23 finish on Thursday, Bankers Association of the Philippines (BAP) data showed.
It also hit an intraday low of P60.57 during the session, which is now the weakest point the peso has touched thus far, surpassing the P60.40 recorded on March 19.
Year to date, the local currency has weakened by P1.76 or 57.886% from its P58.79 finish on Dec. 29, 2025.
Week on week, the peso depreciated by 45 centavos from its P60.10 finish on March 19.
“The peso weakened to P60.55 as markets begin to price in oil-related risks, reinforcing near-term dollar demand. Trading remains constraint-driven, with flows reflecting caution rather than panic,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.
The peso slid to a new all-time low amid market doubts over a ceasefire between Iran and the United States due to mixed signals from both sides, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in Viber message.
Less hawkish sentiment from the Bangko Sentral ng Pilipinas (BSP) after its off-cycle policy meeting on Thursday and higher inflation estimates also dragged down the local unit, he said.
Ahead of its scheduled policy review on April 23, the Monetary Board held an off-cycle meeting on Thursday as it sought to soothe market jitters over worsening inflation risks stemming from the Middle East war.
The BSP left the policy rate unchanged at 4.25% as BSP Governor Eli M. Remolona, Jr. said that adjusting their monetary settings would have limited effectiveness, with current inflation risks due to the war being largely supply-driven.
The central bank now expects headline inflation to average 5.1% this year — well above its 2%-4% tolerance band. Annual inflation last breached the target in 2023.
For this week, Mr. Ravelas said the peso could remain range-bound against the greenback as uncertainty around oil supply persists.
He sees the peso moving between P60.25 and P60.75 per dollar this week, while Mr. Ricafort expects it to range from P60.20 to P60.70.
Global stock markets fell and oil prices rose on Friday, driven by a lack of progress in bringing an end to the four-week-old Middle East conflict that is beginning to sap consumer and business confidence, Reuters reported.
The global equity market sell-off has deepened in recent days, as US President Donald J. Trump’s statements about negotiations are increasingly viewed as less important than the situation in the Gulf, where attacks persist and the crucial Strait of Hormuz is effectively blocked by Iran.
Mr. Trump extended a deadline for Iran to reopen the Strait of Hormuz, but Iran has given no direct indication that it was ready to negotiate. The country’s Islamic Revolutionary Guard Corps reiterated it would continue to disrupt shipping through the strait, which is used to ship roughly one-fifth of the world’s oil and gas supply.
Brent crude futures rose 4.22% to settle at $112.57 a barrel. US West Texas Intermediate futures settled up 5.4% at $99.64.
Government bond yields rose, as central banks are seen as more likely to raise interest rates to head off a potential inflationary shock from higher energy costs.
The US dollar was higher against major peers, including the euro, Japanese yen and Swiss franc.
The US dollar index, which tracks the currency against six peers, rose 0.29% to 100.17 for a fourth straight session of gains. — Aaron Michael C. Sy with Reuters
