FX.co ★ Philippine Peso Falls Toward Record Low

The Philippine peso weakened to around 61.70 per US dollar in mid-July, moving back toward record lows as renewed conflict in the Middle East pushed oil prices higher and weighed on emerging-market currencies. The slide underscored the Philippines’ vulnerability to rising energy costs, given its heavy dependence on imported fuel. Crude prices jumped following fresh US and Iranian strikes, with Washington reimposing a blockade on shipping through the Strait of Hormuz and stoking concerns over global oil supply. The peso has lost more than 4% against the US dollar so far this year, increasing the risk of imported inflation and intensifying pressure on the Bangko Sentral ng Pilipinas to shore up the currency. In June, the central bank raised its benchmark interest rate by 25 basis points to 4.75%, its second consecutive hike, as policymakers moved to counter persistent inflationary pressures.