Local equities declined as the peso dropped to an all-time low against the United States (US) dollar and global oil prices advanced, stoking fears that accelerating inflation will force borrowing costs to stay elevated.
The Philippine Stock Exchange index (PSEi) sank 106.36 points, or 1.7 percent, to close at 6,158.34 on Wednesday, Aug. 19, with service-sector companies leading a broad-based retreat across all industry groups. Trading volume remained largely steady, with 843 million shares worth ₱5.78 billion changing hands. Decliners outpaced gainers 119 to 74, while 54 issues ended unchanged.
The benchmark index’s retreat came as the local currency traded down to the 62 level per dollar during intra-day session, setting off alarm bells for import-dependent industries and local market participants.
“The local bourse ended lower as investors reacted to the peso's depreciation, which touched the 62-level against the greenback, raising concerns over inflation and borrowing costs,” said Luis Limlingan, managing director at Regina Capital Development Corp.
The currency's weakening weighed directly on market sentiment, while broader international weakness added further downward pressure on domestic shares, Limlingan noted.
Moreover, mounting geopolitical friction in the Middle East drove crude prices toward three-week highs, intensifying cost pressures for energy importers across Asia.
US President Donald Trump signaled that Washington is not engaged in discussions with Tehran and has no immediate plans to pursue dialogue. In response, Iran is reportedly assessing potential targets against US military assets in Europe should hostilities broaden.
“The local market plunged as global oil prices continue to climb while the peso hit record lows intra-day, all mainly due to the uncertainties in the situation in the Middle East along with the risks of escalation,” said Japhet Tantiangco, research manager at Philstocks Financial Inc.
Investors are also monitoring potential trade and supply chain disruptions as Washington considers further measures. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that energy markets remained elevated as participants awaited possible unprecedented economic sanctions by the US against Iran, which could be announced as early as this week.
