Peso weakness may persist as war-driven risks cloud outlook

THE PESO may continue to weaken this week and possibly hit new lows against the dollar due to renewed global oil price concerns as the Middle East war continues, and with data to be released this week expected to reflect the impact of the conflict on the Philippine economy.

On Thursday, the currency closed at P61.485 a dollar, gaining 8.2 centavos from its record-low finish of P61.567 on Wednesday, according to Bankers Association of the Philippines data posted on its website.

Week on week, this was down by 78.5 centavos from its P60.70 close on April 24.

Philippine financial markets were closed on Friday (May 1) for Labor Day.

For this week, foreign exchange trading will continue to depend on oil price movements and activity in the Middle East region, a trader said in a phone interview.

US President Donald J. Trump said on Saturday he had been told about the concept of a deal with Iran, but was waiting for the exact wording, while warning there was still the possibility of restarting strikes on the country if Tehran misbehaves, Reuters reported.

A senior Iranian official said on Saturday that an Iranian proposal so far rejected by Mr. Trump would open shipping in the Strait of Hormuz and end the US blockade of Iran while leaving talks on Iran’s nuclear program for later.

Reuters and other news organizations reported over the past week that Tehran was proposing to reopen the strait before nuclear issues were resolved. The official confirmed that this new timeline had now been spelled out in a formal proposal conveyed to the United States through mediators.

The United States and Israel suspended their bombing campaign against Iran four weeks ago, but appear no closer to a deal to end a war that has caused the biggest disruption ever to global energy supplies, roiled global markets and raised worries about the possibility of a wider global economic downturn.

Global oil prices eased on Friday following news of the Iranian proposal, coming off Thursday’s four-year high. Benchmark Brent crude was down 1% to around $109.

The trader added that Philippine first-quarter gross domestic product (GDP) and April inflation data to be released this week could weigh on sentiment as these could reflect the impact of the Middle East conflict on the economy.

The Philippine Statistics Authority will release April inflation data on Tuesday (May 5).

A BusinessWorld poll of 17 analysts yielded a median estimate of 5.5% for the April consumer price index in April, accelerating from the 4.1% in March and 1.4% a year ago.

This would be the fastest in over two years or since the 6.1% in September 2023 and be the second straight month that inflation settled above the central bank’s 2%-4% target.

Still, this would be below the Bangko Sentral ng Pilipinas’  5.6%-6.4% forecast for the month.

Meanwhile, first-quarter GDP data will come out on Thursday (May 7). The Philippine economy likely grew by 3.4% in the first quarter, according to a median forecast of 21 analysts separately polled by BusinessWorld.

If realized, this would be slower than the revised 5.4% expansion recorded in the same period last year, but faster than the 3% growth logged in the fourth quarter of 2025.

Meanwhile, the potential increase in remittances before the new school year could give the peso some support, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He expects the currency to range from P61.20 to P61.70 this week, with P62 being a key resistance, while the trader sees it moving between P61.30 and P61.80 per dollar. — A.M.C. Sy with Reuters