The Philippine peso has crossed the P62 per US dollar threshold for the first time in history, weakening 0.61 percent to a record-low P62.265 against the greenback on Friday, while the Philippine Stock Exchange Index (PSEi) fell below the 6000 threshold, down 0.80 percent to 5,956.33,

Investors remained in risk-off mode amid persistent geopolitical uncertainty, elevated US yields and concerns over the economic outlook.

Record-low close

The peso’s latest decline followed Thursday’s record-low close of P61.888, marking its second consecutive record-low finish.

The currency opened at P62.05 and weakened to as low as P62.27– a new intraday high, peaking at P62.27, surpassing the previous record of P61.995 last 18 August.

The move came despite easing oil prices, as renewed concerns over the US-Iran conflict and disruptions around the Strait of Hormuz kept demand for dollars elevated.

The peso has now weakened nearly 1 percent from Wednesday’s P61.650 close, down roughly 7.4 percent since the 28 February close of P57.66 prior to the onset of the conflict.

This marks the fourteenth time the local currency has slumped to record lows since the onset of the Middle East conflict in March.

Meanwhile, the PSEi extended Thursday’s 2.16-percent plunge, slipping below the psychologically important 6,000 level. The benchmark has now fallen about 4.72 percent over the past five trading sessions.

Equity investors continued Thursday’s sell-off, digesting the Bangko Sentral ng Pilipinas’ recent move to hike its key policy rate up to 5 percent in light of persistent inflationary pressures, including the El Niño season, other weather disturbances, and rising prices in select food items.

Tight money policy at the expense of long-term growth

Tighter monetary policy, while effective in fighting accelerated inflation, often comes at the expense of long-term growth, which remains at 2.3 percent as of the second quarter as infrastructure investment remains subdued.