Government moves to curb Middle East price shocks

The government is preparing a package of measures to shield Filipinos from sudden price increases as tensions in the Middle East threaten to push up global oil costs, while February inflation remained within the state’s target range.

The Department of Finance said the response will include gradual fuel price adjustments, targeted subsidies and other interventions meant to keep transport and food costs from rising too sharply.

Finance Secretary Frederick D. Go said the government was moving quickly to deliver a calibrated response to external risks.

“The Department of Finance will continue coordinating with relevant agencies to ensure a measured, responsible, and timely response to evolving global developments,” Finance Secretary Frederick D. Go said.

Headline inflation rose to 2.4% year on year in February 2026 from 2.0% in January. That brought average inflation for January to February to 2.2%.

The February print matched the median estimate of private sector analysts at 2.4%. It also fell within the Bangko Sentral ng Pilipinas forecast range of 2.3% to 3.1% for the month.

The result remained within the government’s 2% to 4% inflation target, indicating that price pressures were still manageable for households.

The BSP and the government have kept the inflation target at 3.0% with a tolerance band of plus or minus 1.0 percentage point for 2025 to 2028, effectively preserving the 2% to 4% target range cited in the February inflation report.

To cushion the impact of rising global oil prices on daily transport and logistics costs, the National Government is working with local oil companies on gradual fuel price adjustments spread over several weeks.

President Ferdinand R. Marcos Jr. has also said he is considering a temporary reduction or suspension of excise taxes on fuel to soften the effect of higher pump prices on goods and services.

Officials said the Philippines maintains enough fuel stocks to cover about two months of national demand, giving the country a temporary buffer against supply disruptions.

The Department of Transportation and the Land Transportation Franchising and Regulatory Board are also set to roll out fuel subsidies for public utility vehicle operators to help drivers cope with rising costs and keep fares more affordable for commuters.

The Department of Agriculture is preparing separate fuel subsidies for farmers and fisherfolk in a bid to prevent higher production costs from feeding into food prices.

Another measure under consideration is free public transportation.

The Metropolitan Manila Development Authority, working with private companies, plans to launch the Electric Love Bus program on select Metro Manila routes by late April or early May.

“The government is closely monitoring global oil prices and the duration of the ongoing conflict, so we can respond accordingly. We remain vigilant, prepared, and committed to protecting the welfare of all Filipinos,” Secretary Go said.

The inflation data released alongside the government’s contingency plans showed that households in the lowest 30% income bracket felt a sharper pickup in price growth, with inflation accelerating to 2.5% in February from 1.6% in January.

Higher food prices accounted for much of the increase in headline inflation.

Inflation for vegetables, fish and seafood climbed because of weather-related disruptions and the implementation of the closed fishing season.

Rice inflation continued to decline, but at a slower pace.

That moderation in rice prices reflected tighter supply conditions following import restrictions imposed in late 2025 and the ongoing lean season.

Non-food inflation also increased, particularly for housing, water, electricity, gas and other fuels, as well as restaurants and accommodation services.

On a seasonally adjusted month-on-month basis, headline inflation rose to 0.4% in February from 0.1% in January.

Core inflation, which excludes volatile food and energy prices, also edged up to 2.9% year on year in February from 2.8% a month earlier.

The BSP said the Monetary Board would remain vigilant and continue to rely on incoming data in assessing the inflation outlook.

The central bank also said it was closely watching developments in the Middle East, particularly the risk that rising oil prices could trigger broader price pressures.

It added that policy settings would remain aligned with its mandate to preserve price stability while supporting sustainable growth and development.