HIGHER prices of domestic fuel, electricity and transport fares could drive inflation in October to the fastest pace in three years and eight months, latest inflation forecast of the Bangko Sentral ng Pilipinas (BSP) showed.
In a statement on Friday, the central bank said it projects October 2026 inflation to settle within the 7.1 to 8.1 percent range.
‘Upward price pressures are likely to come from higher prices of domestic fuel, electricity, and transport fares,’ the BSP said.
These pressures, however, could be ‘partially offset’ by lower prices of key agricultural commodities, such as rice, vegetables, meat, and fish, owing to favorable supply conditions.
Should inflation in October hit the upper end of the central bank’s forecast range at 8.1 percent, this would be the fastest pace in the increase in the prices of goods and services since February 2023, when it reached 8.6 percent.
However, if inflation settles at the lower end of the range or at 7.1 percent, it would mean that inflation eased from the 7.2 percent in September.
In 2026, inflation peaked at 7.2 percent in April before easing to 6.8 percent in May, 6.4 percent in June, 6.2 percent in July and 6.1 percent in August. However, it peaked again in September-matching the 7.2 percent rate in April.
When the September inflation data came out, economists warned that the latest acceleration is becoming harder to pin solely on a few volatile items.
Ateneo De Manila University (ADMU) economist Leonardo Lanzona earlier explained to this newspaper that inflation has become more ‘domestic-driven.’
University of Asia and the Pacific economist Marco C. Agonia agreed, noting that second-round effects are now emerging as inflation rises even in commodity groups without direct exposure to oil prices.
The sentiments of the two economists were echoed by Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera, who emphasized that inflation will be ‘harder to bring down quickly because the pressure is no longer confined to volatile food and energy prices.’
In earlier commentaries, bank economists warned that inflation is likely to accelerate further in the fourth quarter of 2026 and could peak in November.
No less than the Bangko Sentral ng Pilipinas (BSP) said at its latest monetary policy stance briefing that the inflation rate could continue to increase in the last quarter of 2026.
‘Maybe just to describe it a little bit, if our average inflation forecast for 2026 is 6.1 percent, and then the actual numbers so far for the first nine months of the year is about 5.4 percent. So that means that the inflation rate could continue to increase in the last quarter of 2026. The last print is 7.2 percent. So there could still be some increase in inflation numbers for the coming months, as well as going into the early months of 2027,’ BSP Deputy Governor Zeno Ronald R. Abenoja said on October 22.
In its statement, the central bank vowed to remain vigilant and guided by incoming data, particularly on inflation and growth prospects.
‘It will continue to assess the impact of the latest developments in the Middle East on the country’s inflation and economic outlook,’ the BSP also noted.
The actual headline inflation rates for this year were the following: January, 2 percent ; February, 2.4 percent; March, 4.1 percent; April, 7.2 percent; May, 6.8 percent; June, 6.4 percent; 6.2 percent in July, 6.1 percent in August, and 7.2 percent in September, data from the Philippine Statistics Authority (PSA) showed.