Philippine Peso Reverts to P61/$1 Amid Mideast Tensions and Inflation Worries

The Philippine peso depreciated back to the P61-to-one dollar level on Tuesday, after touching the P60:$1 territory the previous day, amid global economic uncertainties arising from the renewed conflict between the United States and Iran. The local currency shed 23.5 centavos to close at P61.165:$1 from P60.93:$1 on Monday. The peso opened at P60.95:$1 and hit an intraday high of P60.9:$1 and intraday low of P61.222:$1. Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the peso’s weakness came “after Iran denied talks/negotiations with US,” resulting in further global economic uncertainty over when the Strait of Hormuz will be fully reopened. Ricafort noted that the benchmark Brent crude oil price corrected slightly higher to $84 per barrel levels versus $83 levels in the previous trading day. "It is worth noting that the peso exchange rate was relatively stable versus the US dollar recently amid possible intervention/smoothening of market volatility at P61.60-P61.80:$1 levels/range highs recently; possible future BSP rate hikes especially on the next rate-setting meeting on August 27, 2026 to help stabilize the peso exchange rate, importation costs, and, in turn, also better manage inflation and inflation expectations,” the economist added. The Philippine economy relies heavily on remittances from Overseas Filipino Workers (OFWs) and revenues from the Business Process Outsourcing (BPO) sector. The stability of the exchange rate directly impacts the value of these foreign currency inflows. Furthermore, higher import prices can fuel domestic inflation, eroding consumer purchasing power. The Bangko Sentral ng Pilipinas' (BSP) monetary policy plays a crucial role in balancing inflation control with economic growth.