The Philippine peso reached a new all-time low on Monday, closing at P61.75 against the US dollar, a drop of 2.9 centavos from its previous record low of P61.721 on Friday. Simultaneously, the Philippine Stock Market index (PSEi) declined by 35.25 points, or 0.59 percent, to end the day at 5,941.52. Investors and traders attributed these movements to heightened sensitivity to both global and domestic uncertainties.
A trader explained that the peso’s fluctuations are increasingly driven by market sentiment rather than fundamental economic indicators. The trader noted the continued strength of the dollar, coupled with increased demand for safe-haven assets, higher oil-related dollar demand, and a growing sensitivity to domestic uncertainties. These factors, alongside market positioning and momentum, have contributed to exaggerated currency moves in a low-liquidity environment. The outlook for the peso remains bearish in the near term, with P62 to the dollar now within psychological reach, though sharp fluctuations in both directions are anticipated.
The peso’s decline aligns with similar record lows experienced by the Indonesian rupiah and the Indian rupee, as heightened tensions in the Gulf have driven oil prices and global yields higher. This scenario has fortified the dollar, adding pressure on oil-importing economies. The rupiah, a notable underperformer in the region, dropped 1.16 percent to 17,665 per dollar, marking its biggest single-day percentage loss since April 2025. Meanwhile, the rupee fell to an all-time low of 96.303 per dollar, extending its downward trend since oil prices surged following the Iran conflict in late February.
Michael Wan, an analyst at MUFG, highlighted that Asian emerging market currencies are bearing the brunt of a stronger dollar. Both the rupee and the peso are doubly affected by rising oil prices, while currencies sensitive to yields, like the rupiah, face additional domestic challenges. Philstocks Financial Inc.’s research manager, Japhet Tantiangco, pointed out that concerns over the Middle East conflict have resurfaced, especially following recent threats by Trump towards Iran, prompting a defensive stance among investors.
Market activity remained subdued, with net value turnover dropping to P3.85 billion, significantly below the year-to-date average, reflecting ongoing investor hesitation. Foreign funds continued to stay away, with net outflows reaching P225.76 million. Only the property sector managed to close in positive territory, with a slight increase of 0.19 percent, while the mining and oil sectors led the declines with a 3.4-percent drop. Overall, market breadth was negative, with 117 stocks declining against 65 advancing, while 68 issues remained unchanged.