Philippine equities and the local currency rallied sharply on Monday, June 15, as global markets reacted to the breakthrough diplomatic agreement between the United States (US) and Iran.

The surprise interim deal, which includes plans to lift the blockade on the Strait of Hormuz and restore disrupted energy trade routes, sparked an aggressive unwinding of long-dollar positions in emerging Asian economies.

The Philippine Stock Exchange Index (PSEi) surged 362.82 points, or 6.14 percent, to close at 6,272.88. The advance marks the highest closing level for the main index since March 6, 2026.

Banking equities led the broad-based market expansion, driving total trading value up to ₱12.75 billion on a volume of 679 million shares. Market breadth was decisively positive, with 144 advancing stocks outpacing 58 decliners, while 43 issues remained unchanged.

“The local bourse ended significantly higher after the US and Iran reached an agreement and announced the end of the Strait of Hormuz blockade, easing geopolitical concerns,” said Luis Limlingan, head of sales at Regina Capital Development Corp.

He added that the development “triggered strong buying pressure, making the local index one of the top gainers in the region.”

The local currency mirrored the equity market's momentum. The peso appreciated by 1.4 percent to close at ₱60.48 against the US dollar, breaking back below the key psychological ₱60 handle. The session opened at ₱60.60 before the currency touched an intraday high of ₱60.445 and a low of ₱60.73.

Monday’s close marked the strongest finish for the peso since May 8, 2026. Total spot volume on the Bankers Association of the Philippines platform reached $1.678 billion, a contraction from the $2.273 billion recorded during the previous session on Thursday.

Local financial markets had been closed on Friday, June 12, for the Independence Day public holiday.

The formal signing of the peace accord, scheduled for June 19, is expected to ease structural pressures on consumer prices in the Philippines, which relies heavily on imported energy. Following the announcement of the diplomatic framework, Brent crude prices fell toward the $80-per-barrel threshold.

Philstocks Financial Inc. Research Manager Japhet Tantiangco said the peace deal “is seen to bring oil prices lower which, in turn, bodes well for the country’s inflation outlook.”

Prior to the agreement, the peso’s vulnerability to elevated oil prices had fueled speculation among market participants that the Bangko Sentral ng Pilipinas might deploy an aggressive, off-cycle interest rate increase to anchor the exchange rate.

That sentiment has shifted locally toward optimism, though tempered by institutional caution. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the local currency stands to benefit further from easing crude oil volatility, projecting that the peso could realistically appreciate back to the ₱59 level within the second half of June or by July.

However, broader macroeconomic headwinds may still limit the currency's runway. Robert Dan Roces, group economist at SM Investments Corp., noted that while a return to the ₱59 handle is within reach, geopolitics alone cannot sustain a prolonged rally.

He emphasized that the overarching trajectory of the Federal Reserve’s monetary policy and subsequent broad-based dollar strength will remain equal determinants of the peso's long-term value.