FX.co ★ Philippine 10Y Yield Hits Over 20-Month High

The yield on the Philippines’ 10-year government bond has risen to around 6.61%, its highest level since June 2024, as climbing oil prices fuel inflation concerns and revive expectations of tighter monetary policy. Peso-denominated bonds are especially vulnerable to surges in crude prices, since higher fuel costs quickly pass through to transport and food in the country’s consumption-driven economy. Inflation accelerated to 2.4% in February—its fastest pace in more than a year—while the peso continues to hover near record lows. The latest oil rally has prompted investors to dump local bonds, reversing earlier demand that had been supported by ample liquidity and attractive valuations. Policymakers have cautioned that a sustained oil price near $100 per barrel could push inflation above the central bank’s target range, likely triggering a more hawkish stance and driving yields even higher. At the same time, global markets remain jittery amid mixed signals and growing uncertainty over the war in the Middle East.