BUSINESS

Philippine September inflation ties three-year high of 7.2%

Toby Magsaysay · Oct 6, 2026, 2:47 PM

ECONOMIC OUTLOOK Buildings tower over a low-rise residential area in Pasig City. The United Nations said that as the country rebounds from a corruption scandal, the Philippine economy may expand at a faster pace this year and in 2027, supported by household consumption and easing inflation. In its latest World Economic Situation and Prospects report, the UN projected Philippine gross domestic product growth at 5.7 percent this year and 6.1 percent in 2027. — ANALY LABOR

The Philippines’ inflation rate accelerated to 7.2 percent in September, ending four consecutive months of easing as food, household utilities and transport costs rose faster, according to the Philippine Statistics Authority (PSA).

The September print matched the three-year high recorded in April, when domestic pump prices felt the full force of the Middle East conflict’s impact on global oil supply. Inflation rose sharply from 6.1 percent in August and 1.7 percent a year earlier, bringing the average for the first nine months of 2026 to 5.4 percent, well above the government’s 2 to 4 percent target range.

Food and non-alcoholic beverages inflation rose to 6.7 percent in September from 4.6 percent in August. Housing, water, electricity, gas and other fuels inflation accelerated to 8.4 percent from 7.9 percent, while transport inflation climbed to 14.6 percent from 13.5 percent.

Together, the three groups accounted for 78.1 percent of overall inflation, showing that the September acceleration was concentrated in major household spending categories.

Food inflation rose to 6.8 percent from 4.6 percent in August and 0.8 percent a year earlier. The sharpest increase came from vegetables, tubers, plantains, cooking bananas and pulses, whose prices rose 10.7 percent year-on-year after declining 3.4 percent in August.

Rice inflation also accelerated to 20.3 percent from 19.4 percent. Other food categories that recorded faster inflation included flour, bread and other bakery products, pasta and other cereals at 4.5 percent; fish and seafood at 7.4 percent; fruits and nuts at 8.7 percent; and ready-made food and other food products at 3.4 percent.

The impact was heavier on lower-income households. Inflation among the country’s bottom 30 percent income households rose to 9 percent in September from 8.2 percent in August, bringing their January-to-September average to 6.5 percent. A year earlier, inflation for the group was at an annual decline of 0.2 percent.

Food accounted for 55.7 percent of the overall inflation experienced by the bottom 30 percent income group, contributing 5 percentage points. Housing and utilities accounted for 17.5 percent, or 1.6 percentage points, while transport contributed 11.2 percent, or 1 percentage point.

Food inflation for the group reached 9.8 percent, up from 8.3 percent in August. Rice inflation rose to 23.6 percent from 22.5 percent, while inflation in vegetables, tubers, plantains, cooking bananas and pulses accelerated to 9 percent from 1.2 percent.

Core inflation, which excludes selected food and energy items, also accelerated to 4.7 percent in September from 4.1 percent in August and 2.6 percent a year earlier, indicating that price pressures were also broadening beyond food and energy.

The September inflation reading fell within the upper end of the Bangko Sentral ng Pilipinas (BSP)’s forecast range of 6.4 to 7.4 percent for the month.

“Rice inflation accelerated due to tighter domestic supply and higher transportation costs. Fish and vegetable inflation also rose as weather disturbances disrupted supply, while renewed concerns over the spread of swine flu drove meat inflation. Rent and domestic petroleum prices were also generally higher.

The BSP has hiked interest rates three times to combat the acceleration in headline inflation, which now stands more than four times higher than December 2025’s 1.7 percent.