MANILA
Inflation in the Philippines eased to 6.1 percent in August, marking the fourth consecutive monthly decline from a three-year high of 7.2 percent in April, according to data released by the Philippine Statistics Authority on Sept. 4.
The August rate fell from 6.2 percent in July, driven primarily by moderation in food inflation—falling vegetable prices and slower increases in fish prices—alongside reduced electricity inflation.
However, the cooling remains incomplete. Average inflation from January through August stood at 5.2 percent, significantly above the government's 2 to 4 percent target band. Rice and fuel prices remain sharply elevated, creating persistent upward pressure.
The Bangko Sentral ng Pilipinas had forecast August inflation between 5.5 and 6.5 percent. The 6.1 percent outcome fell within this range.
In response, the BSP's Monetary Board raised its benchmark rate by 25 basis points to 5 percent on Aug. 27—the third consecutive increase—to prevent inflation from becoming embedded.
The central bank attributed inflation drivers to higher prices for rice, vegetables, fruits and fish linked to unfavorable weather, as well as elevated domestic fuel costs. These were partially offset by lower meat and electricity prices and appreciation of the Philippine peso.
The BSP lowered its 2026 average inflation forecast to 6.1 percent from 6.4 percent but substantially raised its 2027 projection to 5.4 percent from 4.5 percent. The central bank does not expect inflation to approach its 3 percent target midpoint until 2028.
This upward revision signals the BSP perceives structural inflationary forces beyond near-term food and energy dynamics. The central bank cited potential impacts from El Niño conditions and future wage adjustments, including the stalled Metro Manila wage hike, as factors requiring preemptive rate action.
