Peso weakens further, prompting central bank action to steady currency markets.
Dubai: The Philippine peso weakened to a fresh low against the UAE dirham Monday morning, reflecting strain on emerging market currencies amid global market turbulence.
The peso traded at 16.24 against UAE dirham at around 9:45 am, marking its weakest level against the dirham and underscoring the sharp depreciation seen throughout March.
The latest decline comes amid a surge in global oil prices beyond $100 per barrel, driven by escalating geopolitical tensions in the Middle East—a development that hits fuel-importing economies like the Philippines particularly hard.
Currency slide accelerates
The peso’s decline has accelerated over the past month, reflecting a steady weakening trend. Between March 13 and March 15, the currency traded at 16.21 per UAE dirham, before slipping further to 16.24 on March 16. Just a week earlier, the peso hovered around 15.96 on March 10, with levels of 16.04 on March 11 and 16.10 on March 12.
Earlier in March, the peso traded near 15.9 on March 5 and 15.88 on March 4, following levels of 15.84 and 15.78 on March 3 and March 2, respectively. At the start of the month, the exchange rate stood at 15.63, largely unchanged from the final days of February.
During the latter half of February, the peso moved within a narrower range, fluctuating between 15.51 and 15.77, before entering a gradual decline that accelerated in early March.
The currency’s slide reflects mounting pressure from rising energy costs and heightened global risk sentiment, which have driven investors toward the US dollar.
Central bank steps in
Pressure on the peso has also been apparent in the broader foreign exchange market, where the currency approached a key psychological level against the US dollar.
The peso dropped as much as 0.3% to 59.94 per dollar, nearing a record low, before stabilising following intervention by the Bangko Sentral ng Pilipinas (BSP).
“Since the dollar is down, I assume some intervention can push the peso back below 60,” said BSP Governor Eli Remolona Jr., confirming that authorities had acted to steady the currency.
Government officials in Manila have been closely monitoring the situation. The 60-per-dollar threshold is seen as a critical line for policymakers, with President Ferdinand Marcos Jr. previously signalling that he does not want the peso to weaken to that level.
Oil prices add fresh pressure
Energy markets continue to weigh heavily on the peso. Brent crude has surged above $100 a barrel, extending gains amid supply disruptions linked to the Iran conflict and escalating tensions along Gulf shipping routes.
The Philippines’ reliance on imported fuel makes the peso particularly vulnerable to rising oil prices, which widen the country’s trade deficit and amplify inflationary pressures.
The central bank has previously cautioned that persistently high crude prices could prompt a reassessment of interest rate policy. BSP Governor Eli Remolona Jr. noted earlier this month that if oil remains above $100 a barrel and inflation pressures intensify, a rate hike could be warranted.
