INFLATION OUTLOOK FOR 2026 SPIKES TO 6.3%

Inflation rate could rise to 6.3% in 2026 amidst the ongoing conflicts in the Middle East, the Bangko Sentral ng Pilipinas (BSP) announced on Thursday, April 23.

BSP Gov. Eli Remolona Jr. explained that the inflation outlook has worsened due to the conflict, leading to higher global costs, especially for oil and fertilizer costs.

“The inflation outlook has deteriorated amid the ongoing conflict in the Middle East. Higher global oil and fertilizer prices have begun feeding through to domestic fuel and food prices,” the BSP said.

In response to the rising inflation caused by the Middle East Conflict, key rates were also increased to 4.5%.

"This measured increase is intended to contain the buildup of spillover effects and keep inflation expectations anchored," Remolona said.

The interest rates for the overnight deposit and lending facilities were also adjusted to 4% and 5% respectively.

This adjustment is aimed to maintain price stability while still accommodating economic recovery over the medium term.

Remolona also indicated that commodity prices are expected to remain elevated, with at least 5% monthly inflation.