A bank economist warned that price pressures may become more evident in the coming months as favorable base effects fade and rice import restrictions limit further price declines.
Data from the Philippine Statistics Authority showed that inflation slightly accelerated to 1.7 percent in September from 1.5 percent in August 2025, but remained below market expectations of 1.9 percent. Core inflation, which excludes volatile food and energy prices, also eased from 2.7 percent to 2.6 percent.
Average inflation stood at 1.7 percent, with core inflation averaging 2.4 over the past nine months.
Bank of the Philippine Islands (BPI) lead economist Jun Neri said the latest inflation figures remain generally manageable, with marginal changes recorded in the previous month.
“Looking ahead, risks to inflation remain skewed to the upside. With favorable base effects fading and the extension of rice import restrictions likely limiting further price declines, inflationary pressures may become more evident in the coming months,” Neri said.
He said inflation for certain food items such as vegetables may remain elevated due to supply disruptions caused by typhoons. However, these price pressures could be tempered by imports from China, especially those redirected from the United States.
“Inflation will likely stay close to two percent for the rest of the year, but it could climb to three-point-five percent by mid-2026 and approach four percent by the third quarter,” he said.
Neri said that with inflation likely to pick up in the coming months, monetary easing may slow down, as cutting rates aggressively could leave the economy vulnerable to inflation shocks.
“Another rate cut remains possible this year, although the decision will depend on the GDP [gross domestic product] data due in November. The BSP [Bangko Sentral ng Pilipinas] may cut its rates further in 2026 if growth loses momentum, most likely in the first half before inflationary pressures build in the latter part of the year,” Neri said.
