Inflation will likely rise to at least 8 percent in May as spillover effects from the Middle East conflict continue to spread across goods and services, according to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort.

Ricafort said on Sunday that a combination of elevated oil prices and lingering geopolitical uncertainty will likely push domestic headline inflation beyond the three-year high of 7.2 percent recorded in April.

“It will still increase. It will increase to at least 8 percent from 7.2 percent in April,” he said. “Of course, prices of all affected goods and services will go up,” he added.

Headline inflation surged to 7.2 percent in April, up 3.1 percentage points from March and four times higher than the end-2025 level of 1.8 percent. 

The increase was primarily driven by energy and food-related components, with transport costs rising 21.4 percent and rice prices climbing 13.7 percent year over year amid the ongoing conflict.

Pump prices likewise reached triple-digit levels per liter in April, with diesel, the primary fuel used in public transportation, reaching around P150 per liter.

Ricafort said the continued closure of the Strait of Hormuz due to the conflict remains the main driver behind inflation’s acceleration, noting that countries in the Asia-Pacific region rely heavily on imports passing through the strategic waterway and may eventually need to tap reserve inventories should a peace deal remain elusive.

“It’s still a bit sticky because the Strait of Hormuz is still closed. Twenty percent of the world’s oil and 25 percent of all liquefied natural gas pass through the Strait of Hormuz,” he said.

“It’s been closed since the war began on 28 February. It has been closed for almost three months now. Meaning to say, there is no new inventory or supply of oil,” he added.

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