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Philippine peso hits all-time low vs US dollar amid Middle East war, oil price hike
The central bank has been selling dollar reserves to shore up the local currency. Analysts are looking at a P62 - P63 exchange rate against the US dollar for the rest of the year
- PUBLISHED: Sat 25 Jul 2026, 1:01 PM
[Editor's Note: For the latest updates on how US-Iran hostilities have escalated since a 14-point deal was signed on June 17, follow the Khaleej Times live blog.]
Renewed hostilities in the Middle East have driven the Philippine peso to a new record low of P61.847 per US dollar at the close of trading this week, making it the worst-performing currency in the Southeast Asian region.
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Surging oil prices as both the US and Iran resumed fighting have weighed heavily on Asian currencies, pushing the peso to a fresh all-time low. Crude prices have again surged to more than US$100 a barrel, intensifying pressure on the Philippine economy, an oil-importing country.
The peso is down roughly 5 per cent since the start of the war, ranking among the weaker-performing currencies in Asia. A strong US dollar across global markets also continues to pressure Asian exchange rates.
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The Bangko Sentral ng Pilipinas has been selling dollar reserves in a losing bid to shore up the local currency. Analysts, however, say the Ferdinand Marcos Jr government is already looking at a P62 to P63 exchange rate against the US dollar for the rest of the year.
What it means to OFWs
The current exchange rate woes may mean more money for the 2.4 million overseas Filipino workers in the Middle East sending money home to their families in the Philippines, giving households greater spending power.
But the gains also come with higher costs as imported goods become more expensive.
Already, the Department of Energy has warned of a fifth consecutive oil price hike starting on Tuesday, July 21. Diesel pump prices may again increase by P6.50 per litre, while gasoline may cost P6 per litre more.
Food inflation is currently at 4.8 per cent, transportation at 12.8 per cent, meat products at 4.2 per cent, rice at 15 per cent, and vegetables at 9 per cent, the Philippine Statistics Authority said.
Marcos Jr. is scheduled to deliver his fifth State of the Nation Address on Monday, July 27, and is expected to mention the reclassification of the Philippines as an "upper middle-income economy" by the World Bank earlier this month.