Peso sinks to new record low for third straight day as war drags on
THE PESO dropped to new record low on Monday as the Strait of Hormuz’s continued closure due to the standoff between the United States and Iran drove oil prices higher, fueling demand for the greenback.
The currency edged down by 2.9 centavos to close at P61.75 a dollar from P61.721 on Friday, according to Bankers Association of the Philippines data posted on its website.
Year to date, the peso has depreciated by P2.96 or 4.79% from its P58.79 finish on Dec. 29, 2025.
The local unit opened the session slightly stronger at P61.69 per dollar and climbed to a high of P61.64 against the greenback. Meanwhile, it closed at its intraday low.
Dollars traded went down to $1 billion from $1.199 billion in the previous session.
The peso sank to a new historic low due to higher US retail sales data and elevated global crude oil prices, the first trader said by phone.
The market remains watchful of domestic political developments, although external factors were the main drivers for the peso’s latest slide, the first trader said.
The peso was mainly dragged down by oil-related dollar demand “and a market that is becoming more sensitive to domestic uncertainty,” a second trader said in a Viber message.
“The peso is starting to trade less on valuation and more on sentiment,” the second trader said. “At these levels, positioning and momentum also matter, which can exaggerate moves in thin liquidity.”
The Senate convened as an impeachment court on Monday that could decide the future of Vice-President Sara Duterte-Carpio, with a heated battle between two rival political camps set to be front and center in the trial, Reuters reported. It comes against a turbulent political backdrop, just days after chaos and a shootout in the upper house and a potentially decisive change in its leadership, both stemming from the re-emergence from hiding of a pro-Duterte senator wanted by the International Criminal Court.
Meanwhile, the dollar dipped against a range of major currencies on Monday, but held near last week’s highs, as fresh tensions in the Middle East pushed up global bond yields.
The dollar index was a touch softer at 99.12, having posted its strongest weekly performance in three months last week.
Oil prices climbed on Monday, with Brent crude futures rising more than 1% to over $110 a barrel, after a nuclear power plant in the United Arab Emirates came under attack and efforts to end the US-Israeli war on Iran appear to have stalled.
Demand for the greenback was also supported by expectations of rate hikes from the Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Further denting risk appetite, a global bond rout deepened on Monday as rising energy prices fanned inflation fears and stoked wagers on rate hikes from global central banks.
Markets are now pricing in a more than 50% chance that the Fed would raise rates by December, according to the CME FedWatch tool.
For Tuesday, the first trader sees the peso moving between P61.45 and P61.75 per dollar, while Mr. Ricafort expects it to range from P61.60 to P61.80.
The second trader said the peso could reach the P62 level in the near term, but sharp swings in both directions are likely. — Aaron Michael C. Sy with Reuters
