October inflation seen accelerating to 7.6 percent

Median forecast by economists

MANILA, Philippines — Inflation likely accelerated further in October as higher transport fares, electricity rates, fuel costs and a weaker peso broadened price pressures despite some relief from food prices, according to economists polled by The STAR.

The median forecast of 12 economists stood at 7.6 percent, higher than the 7.2-percent inflation recorded in September. Estimates ranged from 7.3 to 7.8 percent.

Headline inflation, which measures the overall increase in prices commonly paid by households, remained well above the two to four percent target range of the Bangko Sentral ng Pilipinas (BSP) for seven straight months.

Metrobank chief economist Nicholas Mapa, Chinabank chief economist Domini Velasquez, Reyes Tacandong & Co. senior adviser Jonathan Ravelas and UnionBank chief economist Ruben Carlo Asuncion gave the highest forecasts at 7.8 percent.

Economists broadly attributed the expected acceleration to higher transport, electricity and import costs. The peso’s depreciation raised the local cost of fuel, food, raw materials and other goods priced in dollars, while recent wage and fare increases risked spreading price pressures across more goods and services.

Velasquez said higher fares for buses, jeepneys, taxis and transport network vehicle services, as well as increased electricity rates in areas served by Manila Electric Co., likely added to inflation. Gasoline and kerosene prices also rose, although diesel prices declined.

However, lower prices of rice, vegetables, meat, fish, eggs and sugar likely provided some relief.

BPI lead economist Emilio Neri Jr., who projected inflation at 7.7 percent, said October likely captured broadening second-round effects as earlier price shocks spread to wages, fares and other goods and services.

October was the first full month reflecting public transport fare increases and the P60 minimum wage hike in Metro Manila, both of which took effect in late September.

“We have yet to see the peak in inflation this year,” Neri said, adding that the rate could exceed eight percent in November if current price pressures persist.

Security Bank chief economist Angelo Taningco, who gave a 7.5-percent estimate, also cited higher electricity, food, fuel and restaurant prices, along with wage and transport fare increases.

Velasquez expects core inflation to rise to 5.4 percent from 4.7 percent in September, indicating that price pressures are spreading beyond volatile food and energy items.

Moody’s Analytics head of Southeast Asia economics Denise Cheok, who forecast headline inflation at 7.3 percent, said elevated oil prices and adverse weather conditions could keep inflation high through the end of the year.

Economists differed on when inflation would peak. Neri and Velasquez expect the peak in November, while PNB economist Alvin Arogo sees inflation reaching 7.6 percent in February 2027 before falling below four percent by August.

Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco, who projected a more modest uptick to 7.3 percent, said October could already mark the peak. However, he said inflation may not return to the BSP’s target range until April next year.

Most economists who discussed monetary policy saw room for further tightening, although they differed on the likely size of the next move.

The BSP raised its benchmark interest rate by 50 basis points to 5.50 percent on Oct. 22, its fourth rate hike this year. Its final policy meeting for 2026 is scheduled for Dec. 17.