Philippine inflation could stay above 6% through 2026, think tank says

Abi Sarabia M., Philippine Canadian Inquirer
August 20, 2026

Photo courtesy: Philippine News Agency

Philippine inflation is expected to stay above 6% for the rest of 2026, with price growth potentially exceeding 7% in the third quarter, according to the Congressional Policy and Budget Research Department.

The congressional think tank projected full-year inflation at between 5.5% and 6.1%, while third-quarter inflation could range from 6.37% to 7.32%.

Inflation stood at 6.2% in July, marking the third straight month of easing after reaching 7.2% in April.

For the fourth quarter, the CPBRD expects inflation to range from 5.91% to 7.31%.

“Even with volatility, it is highly unlikely that inflation will fall below 6% in 2026,” the CPBRD said.

The agency cited weaker harvests, the monsoon season, a possible super El Niño and fertilizer supply constraints as major risks to prices.

It also flagged supply disruptions linked to the conflict in Iran, along with extreme weather, higher electricity costs, peso depreciation and wage adjustments.

The CPBRD said inflation in the Philippines could remain among the highest in Southeast Asia based on projections from international institutions.

Inflation forecasts for the Philippines vary, with the OECD projecting 6.8%, the Asian Development Bank at 5.9%, the International Monetary Fund at 4.3 percent and the ASEAN+3 Macroeconomic Research Office at 6 percent.

With inflation expected to remain elevated, the CPBRD urged the Marcos administration to pursue a “leaner, smarter” national budget for 2027.

The think tank said a more conservative fiscal approach could help manage persistent price pressures as the government prepares its spending plan for next year.