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With an expected rise in prices of petroleum products on Tuesday, July 28, the peso closed at a new all-time low of ₱61.847 against the dollar on Friday, weighed down by rising global oil prices, escalating geopolitical tensions in the Middle East and a stronger greenback.
The peso, which had closed at its previous record low of ₱61.75 to the dollar during the past two days, closed out the trading week weaker by 9.7 centavos.
The local currency opened Friday at ₱61.80 and traded within a range of ₱61.78 to ₱61.85 during the session.
According to Union Bank’s chief economist Carlo Asuncion, “the peso’s record-low close was driven primarily by external factors, particularly higher oil prices, heightened geopolitical tensions and continued strength of the US dollar.”
“While domestic inflation concerns may have added some pressure, the move largely reflects a challenging global environment rather than a significant deterioration in Philippine economic fundamentals,” Asuncion noted while citing that markets would be watching whether the peso’s depreciation becomes prolonged, as sustained weakness could fuel inflation through higher fuel and import costs.
Reyes Tacandong & Company senior adviser Jonathan Ravelas disclosed that the peso fell as the dollar gained strength amid rising crude oil prices, escalating attacks between the United States and Iran and fresh tariff concerns that renewed inflation worries.
Ravelas added that he expects the peso to trade within the ₱61.70 to ₱62.00 range in the near term.
The currency’s drop was said to have factored in the Philippine Stock Exchange index’s (PSEi) Friday performance: down 0.03 percent, or 2.11 points, to 6,281.01.
Philstocks Financial Incorporated research manager Japhet Tantiangco mentioned that investor sentiment was dampened by the surge in global oil prices with Brent crude reaching the US$100-per-barrel MARK and the continued depreciation of the peso.
“If directions are sustained, both are expected to pose upside risks to inflation,” he detailed to clarify that late bargain hunting helped trim the market’s losses.
At the PSEi, trading remained subdued with net value turnover at ₱5.37 billion. Foreign investors were net sellers with outflows of ₱48.19 million. Services was the top-performing sector, gaining 1.03 percent, while banks posted the steepest decline, falling 1.38 percent.
Among index heavyweights, Century Pacific Food Incorporated advanced 3.33 percent to ₱31.00 while Semirara Mining and Power Corporation dropped 3.97 percent to ₱21.75, making it the day’s biggest loser on the benchmark index.