Inflation slightly cools to 6.1% in August 2026

BASIC GOODS. People buy vegetables at the Paco Market in Manila on March 11, 2026.

Rappler

Though inflation remains on a downward trend, price pressures persist as bad weather keeps the cost of some food items high and the Middle East conflict pushes up fuel prices

MANILA, Philippines – Inflation in the Philippines further eased to 6.1% in August, marking the fourth straight month of decline from a three-year high of 7.2% in April, the Philippine Statistics Authority said on Friday, September 4.

The August rate was slower than the 6.2% recorded in July, as lower electricity and meat prices and a stronger peso helped offset higher food prices brought about by bad weather, as well as elevated fuel costs.

But average inflation from January to August stood at 5.2%, remaining well above the government’s target range of 2% to 4%.

The Bangko Sentral ng Pilipinas (BSP) had projected August inflation to settle between 5.5% and 6.5%. It said higher prices of rice, vegetables, fruits, and fish, partly due to unfavorable weather conditions, as well as elevated domestic fuel costs, were among the factors pushing inflation up. These were expected to be partly offset by lower meat and electricity prices and the peso’s appreciation.

The BSP’s Monetary Board recently raised the benchmark interest rate by another 25 basis points to 5% on August 27, its third consecutive rate increase as the central bank sought to prevent elevated inflation from becoming more persistent. 

At its August meeting, the BSP lowered its forecast for average 2026 inflation to 6.1% from 6.4%, although it substantially raised its 2027 forecast to 5.4% from 4.5%. The central bank expects inflation to return closer to its 3% target midpoint by 2028.

In that meeting, the BSP cited the need to take “preemptive monetary action” to confront the possible inflationary impact of severe El Niño conditions as well as potential wage hike adjustments, including the stalled “historic” Metro Manila wage hike. – Rappler.com