By Katherine K. Chan
HEADLINE INFLATION likely quickened to a six-month high in September, but still below the 2-4% target, due to a rise in food and fuel costs, analysts said.
A BusinessWorld poll of 12 analysts yielded a median estimate of 1.9% for September inflation, within the Bangko Sentral ng Pilipinas’ (BSP) 1.5-2.3% forecast for the month.
If realized, inflation would have accelerated from 1.5% in August but steadied from the 1.9% clip in September 2024.
This would also be the fastest print in six months or since the 2.1% in February.
September may also be the seventh month in a row that the consumer price index fell below the central bank’s 2-4% target range.
The Philippine Statistics Authority is scheduled to release the September inflation data on Tuesday, Oct. 7.
“Inflation in the Philippines likely quickened to 1.9% (year on year) in September from 1.5% in August, after a series of tropical storms damaged crops and pushed up food prices,” Moody’s Analytics economist Sarah Tan said in an e-mail.
Last month, typhoons Mirasol, Ragasa (locally known as Nando) and Bualoi (Opong), coupled with the southwest monsoon, brought heavy rains and flooding in parts of the country.
“Food prices in September surged, mainly because of the strong storms that hit the country. Prices for vegetables and fish shot up significantly, with vegetable prices seeing a particularly dramatic rise compared to last year’s weaker price base,” Metropolitan Bank Trust & Co. (Metrobank) said in a note.
Emilio S. Neri, Jr., lead economist at the Bank of the Philippine Islands, said inflation may have quickened to 1.9% in September, “lifted by higher fish prices amid rains and rising rice costs following the government’s rice import suspension order.”
The 60-day suspension on imports of regular milled and well-milled rice took effect on Sept. 1.
“The ban was put in place to help lift local palay prices and protect Filipino farmers from financial loss. Despite the ongoing import ban, sustained deflation in rice prices this month will continue to temper headline inflation,” Metrobank said.
ENERGY COSTSHigher cost of fuel, electricity and cooking oil may have also pushed up inflation in September, Chinabank Research said.
“However, these upward price pressures were likely tempered by declines in the prices of rice, meat, vegetables, fruits, and sugar,” it said.
In September, pump prices posted a net increase of P2.80 per liter for gasoline, P3.70 per liter for diesel and P2.50 per liter for kerosene.
“I surmise that headline inflation for the month of September 2025 have gone up to 1.7%, owing to the conglomeration of several factors, foremost of which is the unceasing increase in the price of basic petroleum products notably diesel product which in a month’s time has cumulatively increased by more than P4,” Emmanuel J. Lopez, professorial lecturer at the University of Santo Tomas Graduate School, said in an e-mail.
Metrobank said Manila Electric Co. (Meralco) rates were lower month on month in September, but remained elevated compared to last year.
Meralco cut electricity rates by P0.1852 per kilowatt-hour (kWh) in September, bringing the overall rate for a typical household to P13.0851 per kWh from P13.2703 per kWh a month ago. However, this is still higher than the P11.7882 per kWh recorded in September 2024.
“Visayas Electric and Davao Light also saw higher prices for the month, attributed to power plant outages across the country,” Metrobank added.
Angelo B. Taningco, research head and chief economist at Security Bank, said the peso depreciation may have also contributed to the inflation uptick last month.
The peso closed at P58.196 per dollar on Sept. 30, weakening by P1.066 or 1.83% from its finish of P57.13 on Aug. 29.
OUTLOOKChinabank Research said it expects inflation to remain low for the rest of the year, with average inflation settling below the 2-4% target.
Reinielle Matt M. Erece, an economist at Oikonomia Advisory & Research, Inc., said inflation may pick up ahead of the Christmas season as “higher demand adds to price pressures.”
“For the rest of the year, there is a chance inflation could edge up with holiday demand, weather risks, and global oil price movements. But barring major shocks, it would likely stay below or at 2%,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said.
The state weather bureau earlier said they are anticipating that five to nine more tropical storms will hit the country before yearend.
“Looking ahead, inflation risks are skewed to the upside as favorable rice base effects fade, with the extension of the import suspension through yearend adding pressure,” BPI’s Mr. Neri said.
He said inflation will likely stay at the 2% level until December before climbing above 3% in the first half of 2026 due to “base effects and potential supply shocks from possible supply-chain disruptions linked to Trump’s tariffs.”
“Meanwhile, the influx of cheap Chinese exports into global markets, including the Philippines, may help temper price pressures,” Mr. Neri added.
In a separate commentary, Diwa C. Guinigundo, country analyst at GlobalSource Partners, said the projected faster headline inflation may prompt the BSP to pause at its next policy-setting meeting.
“Rice and fish prices remain elevated, while higher fuel costs add another layer of strain on household budgets. These factors are expected to intensify headline inflation,” he said.
“Given this backdrop, the BSP may find it prudent to hold its policy rate steady in the upcoming Monetary Board meeting, prioritizing financial stability over short-term growth support,” he added.
On Aug. 28, the central bank lowered borrowing rates by 25 basis points (bps) to 5%. It has so far slashed the benchmark interest rate by 150 bps under the current easing cycle.
The Monetary Board is set to have its last two meetings this year on Oct. 9 and Dec. 11.
