The Market Monitor Minding the Nation's Business
Inflation accelerated to 2.4% in February, the fastest in 13 months, according to data released by the Philippine Statistics Authority (PSA) this week.
The latest figure is 0.4 percentage points higher than January’s 2.0% and slightly above the 2.1% recorded in February 2025.
The PSA attributed the uptick mainly to faster price increases in food and non-alcoholic beverages, where inflation rose from 1.1% in January to 1.8% in February.
Because the region of conflict is where the Philippines gets its biggest percentage of oil imports, the Department of Energy (DOE) said over the weekend that it was preparing for a worst-case scenario as the war between the United States and Israel, and Iran and its allies, has shown no signs of abatement.
Energy Secretary Sharon Garin said she met with various agencies and private oil firms to discuss ways on how to cope with the problem.
The national objective, she said, is to ensure that we have an adequate supply of petroleum products and that prices remain low for fuel and electricity.
She noted that the pressure points are already felt, such that the prices of LNG and coal have increased, along with diesel oil.
As this developed, the First Deputy Managing Director of the International Monetary Fund (IMF), Director Daniel Katz, has warned that the escalating conflict in West Asia carries significant risks for the global economy, particularly in terms of inflation and growth, but emphasized that it remains too early to assess the full extent of the impact.
Speaking at the Milken Institute’s Future of Finance event in Washington, Katz said that prior to the recent escalation in the Gulf, the global economy had been expected to continue expanding at a solid pace.
However, the latest developments have introduced new uncertainties, and the ultimate economic consequences will depend largely on the duration and intensity of the conflict.
“The conflict could be very impactful on the global economy across a range of metrics, whether it’s inflation, growth and so on, but it was still early to have a firm conviction,” he said.
Inflation rate chart
Selected food and non-food commodity groups (percent). Values from the Philippine Statistics Authority, March 2026.
Category Item / commodity group Inflation rate
Food Corn 9.4%
Food Flour, bread and other bakery products; pasta products; other cereals 2.4%
Food Fish and other seafood 7.7%
Food Milk, other dairy products and eggs 1.4%
Food Fruits and nuts 3.8%
Food Vegetables, tubers, plantains, cooking bananas and pulses 6.1%
Non-food Clothing and footwear 2.4%
Non-food Housing, water, electricity, gas and other fuels 3.5%
Non-food Furnishings, household equipment and routine household maintenance 2.9%
Non-food Health 3.2%
Non-food Recreation, sport and culture 4.3%
Non-food Restaurants and accommodation services 4.4%
Non-food Personal care and miscellaneous goods and services 2.8%
Slower inflation rates, meanwhile, were observed in information and communication, as well as transport.
While this was the inflation rate recorded before conflict in the Middle East escalated and drove up global gas prices, the Department of Economy, Planning, and Development (DEPDev) said it was aware of how the recent geopolitical developments could impact Filipino consumers.
“Overall price conditions remain stable. However, we are mindful of recent geopolitical developments, which we are closely monitoring, along with domestic supply conditions of key commodities,” DEPDev Secretary Arsenio Balisacan said.
Balisacan said the government is preparing short-term measures, including issuing guidelines to conserve fuel.
“We are ready to deploy timely and targeted interventions should external shocks intensify. Our priority is to protect vulnerable households, support affected industries, and sustain the country’s growth momentum amid global uncertainties,” Balisacan said.
The Bangko Sentral ng Pilipinas (BSP) said inflation remains manageable but noted that its 2026 inflation forecast stands at 3.6%.
“The Monetary Board will remain vigilant and guided by incoming data, specifically on inflation. We are watchful of the recent developments in the Middle East for their implications on near-term inflation and economic activity,” the BSP said.
IMF monitors damage
Director Katz said the IMF will examine the direct effects on the region, including physical damage to infrastructure and disruptions to tourism, air transportation, manufacturing, and energy facilities. A prolonged disruption in energy markets, particularly a potential closure of the Strait of Hormuz, could lead to serious economic consequences, especially for countries heavily reliant on oil exports.
The scale of the impact, he added, will vary depending on countries’ exposure levels and fiscal buffers.
Katz also pointed to recent spikes in oil and natural gas prices, as well as moderate increases in interest rates, suggesting that markets are factoring in the risk of higher energy costs fueling inflation.
If the rise in energy prices proves temporary and inflation expectations remain well anchored, central banks may look through the shock. However, a more persistent energy shock that destabilizes inflation expectations could trigger a monetary policy response, according to Katz.
In the face of prolonged uncertainty, he said, central banks are likely to proceed cautiously and adjust policy as conditions evolve. (with reports from Anadolu)