Philippine inflation tipped to stay below 8 per cent as rate views diverge
Security Bank Research and Deutsche Bank both forecast annual inflation of 5.9 per cent, but disagree on whether another December rate increase is needed.
Philippine inflation is forecast to stay below 8 per cent during the final two months of 2026, according to economists at Security Bank Research and Deutsche Bank. Their outlooks differ, however, on whether the Bangko Sentral ng Pilipinas (BSP) should raise borrowing costs again in December.
October inflation hit 7.8 per cent, its highest level in 44 months. Security Bank chief economist Angelo Taningco said that likely marked the peak. Both banks project a full-year average of 5.9 per cent, with cheaper global oil helping to moderate consumer price increases.
Security Bank nevertheless expects a December increase of 25 basis points, taking the policy rate to 5.75 per cent, because underlying price pressures persist. Core inflation, which leaves out volatile food and energy prices, climbed from 4.7 per cent in September to 5.4 per cent in October, a 37-month high.
Deutsche Bank economist Junjie Huang took a different view, saying October’s larger-than-expected increase of 50 basis points was probably enough for now. He said the acceleration in prices was concentrated in energy costs rather than spread broadly across goods and services, favouring more time for earlier rate rises to take effect.
Deutsche Bank projects inflation averaging 7.2 per cent across November and December. Huang warned that further tightening could hurt already-weak domestic demand while doing little to curb energy price increases caused by supply pressures.
