The peso sank to a new historic low of ₱59.5 against the United States (US) dollar on Monday, March 9, as surging oil prices fueled by the escalating military conflict in the Middle East dragged the local currency down by 50 centavos from ₱59 last Friday, March 6.

This level surpassed the previous record low of ₱59.46 posted on Jan. 15.

According to the Bankers Association of the Philippines (BAP), the local currency fell to an intraday low of ₱59.71 and reached a high of ₱59.25, which was also its opening rate.

Total trading volume soared to $2.597 billion, up from Friday’s $1.847 billion.

MUFG Global Markets Research senior currency analyst Lloyd Chan said regional currencies vulnerable to oil price shocks, like the Philippine peso, have been underperforming versus the greenback since the war against Iran began, and they “remain exposed to further terms-of-trade deterioration should energy prices stay elevated or rise further.”

Reyes Tacandong & Co. Ravelas senior adviser Jonathan Ravelas said the slump of the local currency reflects a global shock in oil prices given the escalating geopolitical risk.

“Crude prices are pushing higher, and markets now see the Middle East conflict lasting longer than expected, which keeps pressure on oil, inflation, and currencies like the peso,” Ravelas said.

He noted that the peso slump to its weakest level during the trading day was “not disorderly” but risk-driven.

“If oil stays above $100 and global risk aversion persists, the peso could test or briefly breach 60, but expect volatility rather than a one-way move, with the Bangko Sentral ng Pilipinas’ (BSP) vigilance helping limit excessive swings,” he said.