BSP sees September inflation at 6.4%-7.4%

The Bangko Sentral ng Pilipinas expects inflation to remain elevated in September 2026, projecting the nationwide rate to settle between 6.4% and 7.4% as bad weather, higher fuel costs and a weaker peso put pressure on consumer prices.

The forecast points to continued strain on household budgets, particularly for food and transportation, while persistent price pressures could also complicate the central bank’s decisions on interest rates and economic growth.

The BSP said weather-related increases in the prices of vegetables, fish, rice and fruits are likely to be among the main drivers of inflation during the month.

Recent weather disturbances can disrupt agricultural production and transportation, tightening food supply and raising prices in affected markets.

Higher domestic petroleum prices could add to inflation by directly increasing fuel costs and indirectly raising transportation, production and distribution expenses.

The depreciation of the peso could also contribute to higher prices by making imported fuel, food, raw materials and other foreign-sourced goods more expensive in local currency terms.

The BSP said these upward pressures could be partially offset by lower meat prices and electricity rates.

Even at the lower end of the projected range, September inflation would remain well above the BSP’s 2%-4% inflation target range, keeping price stability a major concern for policymakers and consumers.

Elevated inflation reduces the purchasing power of household incomes and can weigh particularly heavily on lower-income families, which devote a larger share of their budgets to food and other basic necessities.

Persistent inflation can also influence borrowing costs because the BSP considers the outlook for consumer prices when setting monetary policy.

The central bank said it would remain vigilant and continue to base its policy decisions on incoming economic data, particularly developments affecting inflation and growth.

The BSP said it would also continue assessing developments in the Middle East and their possible effects on the Philippine inflation and economic outlook.

Geopolitical tensions can affect international oil prices and shipping costs, which can eventually feed into domestic fuel, transportation and commodity prices.

The central bank is likewise monitoring the effects of recent weather disturbances, which could continue to influence food supplies and prices in the coming months. (BSP)