Peso sinks to P59:$1 level amid Middle East conflict

Philippine financial markets weakened on Friday with the peso depreciating for the seventh straight day to hit its weakest performance in over five weeks, as market players continued to take in the impact of the ongoing conflict in the Middle East.

The Philippine peso shed 37 centavos to close at P59:$1 from Thursday's finish of P58.63, marking its worst showing since it closed at P59.085:$1 on January 27, 2026.

Economists attributed Friday's depreciation to remarks made by Bangko Sentral ng Pilipinas (BSP) governor Eli Remolona Jr., indicating a possible tightening of monetary policy amid inflation concerns.

"The US dollar/peso exchange rate went up after BSP Governor (Eli) Remolona (Jr.) signaled possible BSP rate hike/monetary policy tightening if global crude oil prices breach above $100 per barrel in an effort to stabilize inflation," Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort said in a mobile message.

"Peso depreciation occurred amid increasing inflation expectations due to rising oil prices, which in turn is prompting a shift in rates expectations from further monetary easing to a potential rate hike," Security Bank Chief Economist Angelo Taningco said in a separate mobile message.

Global oil prices have continued to climb due to the ongoing conflict in the Middle East, with oil industry sources expecting a big-time pump price hike in the coming week.

The DOE said prices could be hiked further due to global developments such as the closure of the Strait of Hormuz, a key global shipping corridor. The department said it will appeal to firms to stagger the implementation of hikes starting next week.

President Ferdinand "Bongbong" Marcos Jr. earlier in the week said the country has a stockpile of approximately 50 to 60 days worth of petroleum products, with the country having other sources that can be considered as potential supplies.

"The peso's depreciation to the 59 level against the US dollar further dampened investor confidence and pressured equities across key sectors," Regina Capital Development Corp. Head of Sales Luis Limlingan said in a separate mobile message.

The local stock barometer PSEi also declined by 60.12 points or 0.94% to 6,320.41, while the broader All Shares index fell by 31.00 points or 0.88% to 3,494.99.

"Investors remained cautious amid the ongoing conflict in the Middle East, which continues to weigh on global sentiment, and heighten uncertainty," Limlingan said.

More than 1.661 billion shares, valued at P7.663 billion, changed hands. Decliners led advancers, 116 to 69, while 62 issues remained unchanged. — VDV, GMA Integrated News