Philippine peso falls to new record low amid rising oil prices
The Philippine peso has dropped to a new record low on Monday, March 9, amid the ongoing struggle in the Middle East that has caused energy prices to increase.
According to the Bankers Association of the Philippines, the currency weakened to P59.50 per dollar, which is its lowest record since the previous low of P59.46 on Jan. 15 earlier this year.
It briefly reached P59.71 within the day as the dollar strengthened.
This comes as the Philippines is facing a fuel price increase as a result of the tensions in the Middle East, which has created inflationary pressures in the energy sector.
During the House Committee on Ways and Means hearing on fuel excise taxes on Monday, Department of Energy Sec. Sharon Garin warned that consumers may see fuel prices jumping from P17 to P24 per liter this week.
The price adjustment will be carried out between Tuesday, March 10, and Monday next week, March 16.
The government is unable to control fuel prices since the oil industry is deregulated, meaning oil companies are obligated to only report and justify their price adjustments to the DOE.
If fuel price increases persist for more than a week, they could have broader economic consequences, potentially driving up transportation fares and other expenses.
Aside from fuel, Garin also warned that electricity rates may increase by 16% next month.
Tensions in the Middle East escalated after Israel, with support from the United States, carried out airstrikes on Iran on Feb. 28 that killed Iranian Supreme Leader Ali Khamenei. The resulting retaliatory attacks have destabilized the region and rattled global markets.
The Philippines is particularly vulnerable to the ongoing conflict in the Middle East as it imports about 98% of its crude oil from the region, according to the Philippine Information Agency. Countries such as Saudi Arabia, Iraq, and the United Arab Emirates are among the world’s leading oil exporters.