The Bangko Sentral ng Pilipinas expects June 2026 inflation to land between 6npercent and 7 percent, easing slightly from May’s 6.8 percent print. Lower domestic oil prices and cheaper rice and meat are helping pull prices down. But that relief is partly canceled out by higher electricity rates and more expensive vegetables.
May data already showed inflation cooling. Headline inflation fell to 6.8 percent from April’s 7.2 percent three-year high, beating forecasts for 7.5 percent. Transport inflation slowed to 16.2 percent after fuel prices rolled back, while food and housing/utility costs also eased. On a monthly basis, prices even dropped 0.5 percent — the first decline in a year.
The BSP is watching inflation closely to decide on interest rates. Slower fuel and food inflation gives it room to avoid more aggressive tightening, but “sticky” core inflation complicates things. Core inflation, which strips out volatile food and energy, jumped to 4.1 percent in May — its highest since December 2023. That suggests price pressures are still broad-based beyond just fuel.
The central bank says it will stay “vigilant” and data-dependent. It’s also tracking the Middle East situation because any new oil shock could reverse the recent disinflation and force tougher policy.
Prices are cooling a bit, mainly because fuel got cheaper. But core inflation is still rising, and electricity + geopolitics are risks. For now, the BSP is likely to hold off on rate hikes unless inflation re-accelerates, but it isn’t ready to cut either.
