Philippine inflation spikes to 7.2%, warning of stickier price pressures for businesses

September’s consumer price index climbed to 7.2% year-on-year, with core inflation reaching 4.7%, the highest level in three years. Eleven of thirteen major commodity groups posted faster price gains, and most regions recorded higher inflation, according to one outlet Statistician Dennis Mapa. Economists warn that pending jeepney, bus and taxi fare hikes, Meralco’s first electricity rate increase in 15 years, and a recent P60 minimum-wage rise in Metro Manila could push costs higher in the coming months.

A potential El Niño-driven drought may further strain food and energy supplies, while a soft peso lifts the cost of imported fuel and raw materials. Analysts from SM Investments Corporation, RCBC and one outlet suggest the Bangko Sentral ng Pilipinas may adopt a more cautious or even hawkish stance, with policy meetings slated for late October and December, to prevent inflation from becoming entrenched.