The Philippine peso weakened to about 60.2 per US dollar, setting a new record low, as escalating tensions in the Middle East and rising oil prices weighed on the currency. Heightened threats of attacks on energy infrastructure in the Gulf and broader geopolitical risks boosted safe-haven demand for the US dollar, while foreign selling of local assets further exacerbated the peso’s slide.
The peso has fallen 4.2% so far this month, placing it among Asia’s worst-performing currencies. The Philippines’ heavy dependence on imported energy and its persistent trade deficit heighten the currency’s vulnerability, while a broader risk-off mood across Asian markets is adding to the downward pressure.
The Bangko Sentral ng Pilipinas has so far confined its market interventions to smoothing excessive volatility rather than defending a particular exchange-rate level. However, a prolonged period of oil prices above $100 per barrel could force a shift in policy. At the same time, fiscal pressures are intensifying, as higher borrowing costs underscore the urgency of structural reforms and measures to bolster energy security and domestic demand.
