The Philippine peso may keep testing record lows against the US dollar this week, as inflation risks reemerge amid surging global oil prices linked to the conflict in the Middle East.

On Friday, the peso weakened by 9.7 centavos to a new all-time low of P61.847 against the greenback, compared with its P61.75 close on Thursday, which had been the previous record low.

The currency also fell to an intraday low of P61.85, the weakest level ever reached by the peso.

Since the start of the year, the peso has depreciated by P3.057, or 4.94%, from its P58.79 close on Dec. 29, 2025. Week on week, the local currency declined by 26 centavos from its P61.587 finish on July 17.

A trader said by phone that the sharp rise in oil prices pushed the peso to a fresh historic low on Friday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that further disruptions in the global oil supply chain and heightened tensions between the US and Iran lifted oil prices above $100 a barrel, increasing demand for the US dollar.

“The US dollar/Philippine peso closed weaker after the greenback strengthened on rising crude oil prices as US and Iranian attacks escalated and new tariffs, renewing inflation concerns,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

The Philippines is a net oil importer, making global crude prices and the exchange rate important channels for domestic inflation. A weaker peso raises the local-currency cost of dollar-priced imports such as fuel, which can feed into transport and other consumer prices.

The trader said that mounting inflation concerns tied to the escalation of the Iran war and its impact on global energy costs could lead the peso to test the P62-per-dollar level this week.

At the same time, the trader added that any positive developments related to the conflict, as well as signals from President Ferdinand R. Marcos, Jr.’s State of the Nation Address on Monday, could provide support for the currency.

The Bangko Sentral ng Pilipinas may also continue intervening in the foreign exchange market to smooth market volatility and prevent potentially inflationary currency swings that could add to price pressures from the surge in crude oil, the trader said. The central bank has previously said it participates in the foreign exchange market to temper sharp movements, rather than to defend a specific peso level.

Mr. Ricafort said the US Federal Reserve’s July 28-29 policy meeting could also provide cues for trading this week, as US rate signals can affect the dollar and capital flows across emerging-market currencies.

The trader expects the peso to move between P61.50 and P62 per dollar this week, while Mr. Ricafort sees a range of P61.50 to P61.95. Mr. Ravelas said the peso could trade at around P61.70 to P62 in the near term. — Aaron Michael C. Sy