MANILA, Philippines — The Philippine peso hit its lowest level in over a month on Friday, March 6, 2026, closing at the 59.00 mark against the US dollar. The local currency’s decline is driven by the intensifying conflict in the Middle East, which has triggered a “risk-off” sentiment among investors and sent oil prices surging.
- Closing Rate: ₱59.00 (down 37 centavos from Thursday’s finish).
- Context: This is the peso’s weakest performance since January 27, 2026, when it closed at ₱59.085.
- Intraday Low: The peso reached a low of ₱59.05 during Friday’s trading session.
- Catalyst: Fears of supply shocks following military strikes involving the U.S., Israel, and Iran, which have disrupted traffic through the Strait of Hormuz.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. warned that the central bank could reverse its current “pro-growth” easing cycle and raise interest rates if global oil prices reach $100 per barrel.
- Inflation Risks: Analysts from Nomura and MUFG note that every 10% hike in oil prices typically adds 0.5 percentage points to local inflation.
- Policy Shift: While the BSP recently lowered the key policy rate to a three-year low of 4.25%, Remolona told CNBC that a sustained dollar rally and surging energy costs may force “forceful policy action” to keep inflation within target.
Economists highlight the Philippines as one of Asia’s most vulnerable nations to Middle East instability.
- Oil Dependency: Over 90% of the country’s oil imports come from the region.
- Import Bill: A weaker peso and higher oil prices threaten to bloat the national import bill, potentially widening the current account deficit.
- Emergency Measures: President Marcos is reportedly seeking emergency powers from Congress to reduce excise taxes on petroleum if Dubai crude exceeds $80 a barrel.
