The Philippine Stock Exchange index (PSEi) extended its decline on Monday, falling 35.25 points or 0.59 percent to 5,941.52, as investors remained cautious amid escalating geopolitical tensions in the Middle East and persistent peso weakness.

Market sentiment deteriorated after renewed threats from US President Donald Trump toward Iran revived fears of a prolonged conflict and further disruptions to global oil supply.

Ceasefire on ‘life support’

Over the weekend, Trump said the ceasefire was effectively “on life support” and warned Iran to “get moving or face consequences” after rejecting Tehran’s latest response to a US-backed peace proposal as “unacceptable” and “stupid.”

He also reiterated that Iran must reopen the Strait of Hormuz and suggested the US could take a more aggressive stance if shipping disruptions continue.

Domestically, political uncertainty also weighed heavily on sentiment. Vice President Sara Duterte’s impeachment proceedings formally began Monday afternoon at the Senate, where gunshots were fired last Wednesday just as Duterte’s Articles of Impeachment were being delivered to the chamber.

Political gains for Duterte camp added to investor apprehension

Senator Ronald “Bato” dela Rosa’s impending arrest, combined with the recent leadership change in the Upper House, pointed to further political gains for the Duterte camp, adding to investor apprehension.

Amid heightened uncertainty and anxiety, trading activity remained extremely weak, with net value turnover at just P3.85 billion, well below the year-to-date average of P6.31 billion. Foreign investors remained net sellers, recording P225.76 million in outflows.

Among sectors, Property was the lone gainer, edging up 0.19 percent, while Mining and Oil suffered the steepest losses, dropping 3.43 percent amid volatile commodity prices. AREIT led index gainers, climbing 3.00 percent to P39.50, while Ayala Corp. declined 3.81 percent to P429.00.

Peso falls to its 3rd consecutive record low

The peso, meanwhile, weakened to a third consecutive record low of P61.75 per US dollar, depreciating from Friday’s P61.72 close. This marked the 11th time the local currency has fallen to record levels of weakness against the dollar since the Middle East conflict escalated in March.

The decline reflected broad dollar strength as investors shifted toward safe-haven assets following renewed geopolitical tensions surrounding Iran and the Strait of Hormuz.

Brent crude oil climbed above $110 per barrel, intensifying concerns over imported inflation and worsening trade balances for oil-importing economies like the Philippines.

US Treasury yields also climbed overnight, with the benchmark 10-year yield moving back above 4.9 percent after stronger-than-expected US retail sales and labor data reduced expectations of near-term Federal Reserve rate cuts.

Asian forex markets under pressure

Foreign exchange markets across Asia also remained under pressure, with regional currencies such as the Indian rupee, Indonesian rupiah, and Thai baht weakening alongside the peso as rising oil prices boosted demand for dollars.

Thin Monday liquidity also amplified market moves. The Bankers Association of the Philippines weighted average rose to 61.73 from 61.68, indicating sustained dollar demand throughout the session rather than a brief speculative spike.