Stable prices offer relief amid inflation risks

The government’s commitment to keep prices of 190 basic necessities and prime commodities unchanged through year-end could provide a boost to consumer spending during the Christmas season, even as rising inflation and global uncertainties continue to weigh on the Philippine economy.

Michael Ricafort, chief economist of Rizal Commercial Banking Corp. (RCBC), said the Department of Trade and Industry’s (DTI) price stability assurance was a positive development, particularly as households prepare for increased holiday expenses.

The DTI said prices of the monitored commodities would remain unchanged until Dec. 31, 2026, with supplies remaining adequate nationwide.

Ricafort said seasonal Christmas spending could help support economic activity in the fourth quarter, alongside the expected acceleration of government expenditures.

However, he cautioned that external pressures, particularly the continuing Middle East crisis and its potential impact on global oil prices, remain significant risks to domestic growth.

The Philippine economy expanded by 2.3% in the second quarter of 2026, slower than the 2.8% growth recorded in the preceding quarter, amid higher global oil prices.

Inflation also remains a concern. Ricafort projected the full-year rate at 6% to 6.5%, with October inflation potentially reaching 7.6% from 7.2% in September and approaching 8% in the fourth quarter.

The Bangko Sentral ng Pilipinas (BSP), meanwhile, projected average inflation of 6.1% for 2026, exceeding its target range of 2% to 4%, largely because of elevated fuel costs.

Ricafort attributed persistent inflationary pressures to rising international crude prices, a stronger US dollar that increases import costs, and higher minimum wages.

He said successive domestic fuel price rollbacks and improved weather conditions could help temper these pressures by easing transportation costs and stabilizing food and agricultural prices.

While the DTI’s price commitment offers consumers some assurance ahead of the holidays, the broader economic outlook will continue to depend on inflation trends, energy prices, and the pace of domestic spending.