The peso strengthened sharply on Monday while the Philippine Stock Exchange Index (PSEi) climbed back above the 6,000 level for the first time since 14 May, as easing oil prices and improving global risk sentiment boosted Philippine financial markets.
The local currency appreciated by 22.5 centavos to P61.465 per US dollar from Friday’s P61.69 close as investors reduced safe-haven dollar positions following apparent easing tensions in the Middle East, based on data from the Bankers Association of the Philippines.
The peso posted a notable rebound on Monday, recording its strongest close in several sessions after trading near record lows earlier in May. Intraday, the currency opened stronger at P61.35, briefly touched a high of P61.535, and held within a firmer P61.35 to P61.535 range before settling at P61.465. The BAP weighted average improved sharply to P61.437 from P61.594 previously, while the FX settlement rate strengthened to P61.426 from P61.54, reflecting broad-based demand for the peso throughout the trading day.
Meanwhile, the PSEi rose 0.80 percent to 6,009.38, breaching the 6,000 level for the first time since 14 May.
Investor sentiment improved after US President Donald Trump said talks with Iran were “progressing seriously,” with both sides “closer than people think” to a framework agreement. Washington also reportedly conveyed through Omani mediators that it was open to allowing limited increases in Iranian oil exports during negotiations, signaling efforts to avoid another oil price shock while global inflation remains elevated.
As those signals emerged, Brent crude fell sharply below US$100 per barrel after previously trading near US$110 earlier in the month. Lower oil prices improved sentiment toward oil-importing economies like the Philippines since cheaper crude helps ease inflation risks, narrows trade deficits, and reduces pressure on currencies such as the peso.
The peso rally was also driven by broad dollar weakness in global forex markets as the dollar index softened and Asian currencies, including the Korean won, Thai baht, and Philippine peso, recovered modestly.
Forex markets likewise reacted positively after Trump said negotiations with Iran were “moving in the right direction” and nearing a possible framework agreement. Traders interpreted the comments as reducing the immediate risk of supply disruptions in the Gulf region.
Despite the equity rebound, trading activity remained muted, with net value turnover at only P3.26 billion, the lowest so far this year, suggesting many investors remain cautious over further developments. Foreign investors remained net sellers with P238.39 million in outflows.
Banks led sectoral gains, advancing 1.21 percent, while industrials slipped 0.25 percent. Ayala Corp. (AC) gained 3.42 percent to P460.00, while DigiPlus (PLUS) dropped 5.48 percent to P12.08.