Inflation in the Philippines likely surged to its highest level in over two years in April, driven by rising global oil prices amid the Middle East conflict and higher food costs, a poll of economists showed.
The median estimate of 14 analysts surveyed by the Inquirer put April consumer price index (CPI) growth at 5.5% year-on-year. If confirmed by the Philippine Statistics Authority on May 5, that would be the fastest inflation since September 2023's 6.1%.
The figure falls slightly below the Bangko Sentral ng Pilipinas' (BSP) own forecast range of 5.6% to 6.4%. Still, both the consensus and central bank estimates indicate inflation likely breached the official 2%–4% target band for the second straight month.
"Price pressures in April came from higher fuel and cooking gas costs, as well as increases in key food items like rice, meat, fruits, eggs, and cooking oil," said Domini Velasquez, chief economist at China Banking Corp. She also cited higher electricity rates in Meralco-serviced areas and increased water tariffs in Metro Manila, though lower vegetable prices partially offset the rises.
Velasquez, who estimates inflation at 6.2% for April, warned that inflation could remain above 6% for the rest of the year. "Uncertainty surrounding a lasting resolution to the Middle East conflict continues to pose upside risks to global oil prices. In addition, constrained fertilizer supply and the potential onset of El Niño could weigh down agricultural output and lead to higher food prices."
Aris Dacanay, senior Asean economist at HSBC Global Investment Research, said inflation may have hit 6% last month. While retail fuel prices eased in late April, gasoline and diesel prices rose by double-digits month-on-month, and retail rice prices climbed in Metro Manila.
"With rice and energy being large components of the Philippine CPI basket, second-order effects on inflation—particularly in restaurants, furnishings, and non-volatile food items—might have pushed inflation higher," Dacanay noted.
The BSP has already taken action, raising its key policy rate by a quarter point to 4.5% at its April 23 meeting. Policymakers also considered a larger half-point increase as they acknowledged a "deteriorating" inflation outlook.